Provident Bancorp, Inc. operates as the bank holding company for BankProv that provides various banking products and services.
BankProv is a Massachusetts-chartered stock savings bank that offers both traditional and technology-driven banking solutions to its commercial and consumer clients.
BankProv operates from its main office and branch offices in the Northeastern Massachusetts area, branch offices in Southeastern New Hampshire, and branch located in Bedford, New Hampshire. The company als...
Provident Bancorp, Inc. operates as the bank holding company for BankProv that provides various banking products and services.
BankProv is a Massachusetts-chartered stock savings bank that offers both traditional and technology-driven banking solutions to its commercial and consumer clients.
BankProv operates from its main office and branch offices in the Northeastern Massachusetts area, branch offices in Southeastern New Hampshire, and branch located in Bedford, New Hampshire. The company also has a loan production office in Ponte Vedra, Florida. The company’s primary lending and deposit gathering area encompasses the Seacoast Region of Northeastern Massachusetts and Southeastern New Hampshire. However, the company also receive deposits from its business customers who are located nationwide in addition to its enterprise value and mortgage warehouse loans, which are offered nationwide. The company attract deposits from the general public and use those funds to originate primarily commercial real estate and commercial business loans, and to invest in securities.
Market Area
The company’s primary footprint is generally comprised of the Seacoast Region of northeastern Massachusetts and southeastern New Hampshire, as well as the Manchester and Concord region in central New Hampshire. The company also performs lending activities and generates related deposits in certain segments, including mortgage warehouse and enterprise value lending, nationwide.
Lending Activities
Commercial Business Loans
The company makes commercial business loans primarily in its market area to a variety of small- and medium- sized businesses, including professional and nonprofit organizations, and, to a lesser extent, sole proprietorships.
Commercial lending products include term loans and revolving lines of credit, which are made with either variable or fixed rates of interest. The company focus its efforts on originating such loans to experienced borrowers in its growing small- to medium-sized market, including privately-held companies with local or regional businesses and non-profit entities that operate in its market area.
Enterprise value loans that the company also refer to as search fund lending, merger and acquisition, recapitalization, and shareholder/partner buyout loans, with relationships spanning 28 states. The company originate these loans to small- and medium-size businesses in a senior secured position; relying largely on the enterprise value of the business and ongoing cash flow to support operational and debt service requirements. These are fully amortizing term loans (up to seven years) with material levels of equity and/or combination of seller financing behind the company’s senior secured lending.
A portion of the company’s commercial business loans are guaranteed by the SBA through the SBA 7(a) loan program. BankProv is a Preferred Lender under the SBA’s PLP Program, which allows expedited underwriting and approval of SBA 7(a) loans.
Commercial Real Estate Loans
The company’s commercial real estate loans are generally secured by properties used for business purposes, such as industrial facilities, retail facilities and office buildings. The company currently target new commercial real estate loan originations to experienced investors in its market area.
The company focus its commercial real estate lending on properties within its primary market areas, but the company will originate commercial real estate loans on properties located outside the area based on an established relationship with a strong borrower. In addition to originating these loans, the company occasionally will participate in commercial real estate loans with other financial institutions.
The company originate a variety of fixed- and adjustable-rate commercial real estate loans with terms and amortization periods generally up to 20 years, although the company’s Loan Policy permits longer terms and amortization periods depending on the risk profile, which include balloon loans. The company generally include pre-payment penalties on commercial real estate loans it originate.
Multi-Family Loans
The company seek to originate new multi-family loans to experienced investors in its market area. The company’s multi-family loans are generally secured by properties consisting of five to fifteen units. The company generally do not make multi-family loans outside its primary market areas. In addition to originating these loans, the company also participate in multi-family loans with other financial institutions.
The company originate a variety of fixed- and adjustable-rate multi-family loans for terms up to 30 years. Interest rates and payments on the company’s adjustable-rate loans adjust every three, five or seven years and generally are indexed to the corresponding Federal Home Loan Bank borrowing rate plus a margin. Most of the company’s adjustable rate multi-family loans adjust every five years and amortize over terms of 20 to 25 years. The company generally include pre-payment penalties on multi-family loans it originate.
Construction and Land Development Loans
The company primarily make construction loans for commercial development projects, including hotels, condominiums and single-family residences, small industrial buildings, retail and office buildings, and apartment buildings. Most of the company’s construction loans are interest-only loans that provide for the payment of interest during the construction phase, which is usually up to 12 to 24 months, although some construction loans are renewed, generally for one or two additional years. At the end of the construction phase, the loan may convert to a permanent mortgage loan or the loan may be repaid in full.
The company also originate construction and site development loans to contractors and builders to finance the construction of single-family homes and subdivisions. The company actively monitor the number of unsold homes in its construction loan portfolio and local housing markets to maintain an appropriate balance between home sales and new loan originations.
Residential construction loans include single-family tract construction loans for the construction of entry-level residential homes. While maturity dates for residential construction loans are largely a function of the estimated construction period of the project, and generally do not exceed one year, land development loans generally are for 18 to 24 months.
Mortgage Warehouse Loans
The company’s mortgage warehouse lending business has a national platform with relationship managers across the United States that offers Master Repurchase Agreement facilities (‘facilities’) to independent non-bank mortgage origination companies, which allow them to fund the closing of residential mortgage loans. Each facility advance is fully collateralized by a security interest in one- to four-family residential mortgage loans and is further enhanced by deposit balances. The primary source of repayment of the facilities is the sale of the underlying mortgage loans to outside investors, which typically occurs within 15 days, with the exception of construction loans which generally take longer to pay off due to the nature of the loan. These investors can include Federal National Mortgage Association/Federal Home Loan Mortgage Corporation and Government National Mortgage Association, as well as other large financial institutions.
The company approve facilities to non-bank mortgage origination borrowers by conducting a thorough due diligence review of the company and its ownership to assess their financial liquidity and regulatory risk profiles.
Digital Asset Loans
The company has ceased originating loans to digital asset customers. This loan is secured by cryptocurrency mining equipment, the United States dollar value of Bitcoin held in control accounts, an interest in a joint venture partnership, and cash held at the Bank.
Investment Activities
As of December 31, 2023, the company’s investment portfolio consists of U.S. Government Agency asset- and mortgage-backed securities, and state and municipal bonds.
Deposit Accounts
The majority of the company’s deposits are from depositors who reside in its primary market areas. However, a significant portion of the company’s brokered deposits and listing service deposits, described below, are from depositors located outside the company’s primary market areas. The company also receive out-of-market deposits from the company’s nationwide business customers. Deposits are attracted through the offering of a broad selection of deposit instruments, including noninterest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts, and certificates of deposit. In addition to accounts for individuals, the company also offer several commercial checking accounts designed for the businesses operating in its market area, and the company encourage its commercial borrowing customers to maintain their deposit relationships with the company.
The company’s growth efforts for core deposits (which the company define as all deposits except for certificates of deposit) include a variety of strategies, primarily centered on proactive engagement with its customers. The company’s investment in technology has enabled it to better serve commercial customers who demand faster processing times and simplified online interaction.
Subsidiaries
BankProv’s subsidiaries include Provident Security Corporation, 5 Market Street Security Corporation and Prov 1, LLC. Provident Security Corporation and 5 Market Street Security Corporation were established to buy, sell, and hold investments for their own account. Prov 1, LLC was established to engage in any lawful act or activity for which limited liability companies may be organized. A certificate of cancellation for Prov 1 LLC was executed in 2023.
Supervision and Regulation
The company is subject to examination, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended, as administered by the Federal Reserve Board.
BankProv is a Massachusetts-chartered stock savings bank. The bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation and by the Depositors Insurance Fund for amounts in excess of the Federal Deposit Insurance Corporation insurance limits. BankProv is subject to extensive regulation by the Massachusetts Commissioner of Banks, as its chartering agency, and by the Federal Deposit Insurance Corporation, as its primary federal regulatory and primary deposit insurer. BankProv is required to file reports with, and is periodically examined by, the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of Banks concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, including, but not limited to, mergers with or acquisitions of other financial institutions. BankProv is a member of the Federal Home Loan Bank of Boston.
As a bank holding company, the company is required to comply with the rules and regulations of the Federal Reserve Board. It is required to file certain reports with the Federal Reserve Board and is subject to examination by and the enforcement authority of the Federal Reserve Board. The company is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.
BankProv, as a Massachusetts-chartered stock savings bank, is regulated and supervised by the Massachusetts Commissioner of Banks.
BankProv is a member of the Depositors Insurance Fund, a corporation that insures savings bank deposits in excess of federal deposit insurance coverage. The Depositors Insurance Fund is authorized to charge savings banks a risk-based assessment on deposit balances in excess of the amounts insured by the Federal Deposit Insurance Corporation.
The Federal Deposit Insurance Corporation has extensive enforcement authority over insured state savings banks, including BankProv. BankProv is subject to regulation and examination by the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation.
BankProv is a member of the Deposit Insurance Fund, which is administered by the Federal Deposit Insurance Corporation. Deposit accounts in BankProv are insured up to a maximum of $250,000 for each separately insured depositor per account ownership category.
BankProv’s latest Federal Deposit Insurance Corporation CRA rating was ‘Satisfactory.’
BankProv is subject to federal anti-money laundering and anti-terrorist financing laws, including the Bank Secrecy Act (‘BSA’) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the ‘USA PATRIOT Act’), and those laws’ implementing regulations issued by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (‘FinCEN’).
Interest and other charges collected or contracted for by BankProv are subject to state usury laws and federal laws concerning interest rates. Loan operations are also subject to state and federal laws applicable to credit transactions, such as the Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed, or other prohibited factors in extending credit; Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies; Massachusetts Debt Collection Regulations, establishing standards, by defining unfair or deceptive acts or practices, for the collection of debts from persons within the Commonwealth of Massachusetts; and The General Laws of Massachusetts, Chapter 167E, which governs BankProv’s lending powers.
The deposit operations of BankProv also are subject to, among others, the Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; Check Clearing for the 21st Century Act (also known as ‘Check 21’), which gives ‘substitute checks,’ such as digital check images and copies made from that image, the same legal standing as the original paper check; Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and General Laws of Massachusetts, Chapter 167D, which governs deposit powers. BankProv is a member of the Federal Home Loan Bank System.
The company’s common stock is registered with the Securities and Exchange Commission. The company is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Securities Exchange Act of 1934.
History
Provident Bancorp, Inc. was founded 1828. The company, a Maryland corporation, was incorporated in 2019.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
