Provident Bancorp | research notes

Provident Bancorp: A Leading Regional Financial Institution

Introduction Provident Bancorp, Inc. is a publicly traded financial holding company headquartered in Jersey City, New Jersey. It operates as a leading regional bank and financial services provider with a strong presence throughout the Northeastern United States.

History Provident Bancorp was founded in 1839 as the Provident Institution for Savings. Over the years, it has grown through a combination of organic expansion and strategic acquisitions. In 2003, the company completed a merger with Midlantic Bancorp, Inc., creating one of the largest banks in the New Jersey-New York metropolitan area.

Operations Provident Bancorp provides a comprehensive range of financial products and services to individuals, businesses, and municipalities. Its core operations include:

• Commercial and Industrial Lending: Provides credit to businesses of all sizes.
• Consumer Banking: Offers checking and savings accounts, loans, and mortgages to individuals.
• Wealth Management: Provides investment advisory and wealth planning services.
• Trust and Estate Services: Administers trusts, estates, and other fiduciary accounts.
• Municipal Finance: Serves as a leading underwriter and advisor for municipal bond issuances.

Geographic Footprint Provident Bancorp operates through a network of over 250 branches and financial centers located in New Jersey, New York, Pennsylvania, and Connecticut. The company has a significant presence in the New York City metropolitan area, as well as the New Jersey Shore and Philadelphia regions.

Financial Performance Provident Bancorp has consistently delivered strong financial performance. The company has reported positive net income and earnings per share (EPS) growth in recent years. As of the third quarter of 2023, the company had total assets of approximately $52 billion.

Market Position Provident Bancorp is a significant player in the regional banking landscape. It is ranked among the top 50 banks in the United States by asset size. The company's strong brand recognition and customer relationships have contributed to its success.

Leadership Provident Bancorp is led by CEO and Chairman Nicholas J. Felicetta. Mr. Felicetta has over 30 years of experience in the banking industry and has been instrumental in the company's growth and success.

Conclusion Provident Bancorp is a well-established and financially sound regional bank that plays an essential role in the financial health of the communities it serves. With its comprehensive product offerings, geographic reach, and experienced leadership team, the company is well-positioned to continue its growth and success in the years to come.

Business Model of Provident Bancorp

Provident Bancorp, Inc. is a diversified financial services company that operates across the United States with a focus on the Northeast and Midwest. Its business model consists of three primary segments:

1. Commercial Banking:

• Provides a range of lending and deposit services to small and medium-sized businesses.
• Offers specialized lending programs, such as equipment leasing and commercial real estate financing.

2. Retail Banking:

• Provides traditional banking services to individual customers, including checking and savings accounts, mortgages, and credit cards.
• Focuses on building long-term relationships with customers through personalized service and local branch presence.

3. Wealth Management:

• Offers comprehensive investment advisory and wealth planning services to high-net-worth individuals and families.
• Manages a portfolio of investment products, including mutual funds, exchange-traded funds (ETFs), and separately managed accounts.

Advantages of Provident Bancorp vs. Competitors

Provident Bancorp has several advantages over its competitors in the financial services industry:

1. Strong Regional Focus:

• Provident has a deep understanding of the local markets it serves and has built strong relationships with businesses and individuals in these regions.

2. Customer-Centric Approach:

• The company emphasizes providing personalized service and tailored financial solutions to its customers.
• It maintains a network of local branches and dedicated relationship managers to create a strong connection with its clients.

3. Diversified Business Model:

• Provident's business is spread across multiple segments, which helps to mitigate risk and provide stability in various economic conditions.
• Its wide range of offerings allows it to serve a diverse customer base.

4. Technology Investments:

• Provident has invested heavily in technology to enhance the customer experience and streamline operations.
• Its digital banking platform provides convenient access to account information and financial services.

5. Credit Quality:

• Provident maintains a strong credit quality through conservative underwriting practices and a well-diversified loan portfolio.
• This has enabled the company to weather economic downturns effectively.

Outlook for Provident Bancorp, Inc. (PVBC)

Key Financial Metrics (as of March 31, 2023)

• Revenue: $753.1 million (TTM)
• Net Income: $115.0 million (TTM)
• Diluted EPS: $2.17 (TTM)
• Book Value per Share: $21.42
• Return on Assets (ROA): 1.02%
• Return on Equity (ROE): 10.28%

Analyst Estimates

• Consensus Earnings Estimate for 2023: $2.30 per share
• Consensus Earnings Estimate for 2024: $2.54 per share

Recent Developments

• On March 1, 2023, Provident Bancorp announced its acquisition of Heritage Financial Group, Inc., expanding its footprint in the Ohio market.
• The bank has been actively investing in technology and digital banking platforms to improve customer convenience and efficiency.
• Provident Bancorp has also been focusing on expanding its wealth management and commercial lending services to drive growth.

Industry Outlook

• The U.S. banking industry is expected to face challenges in 2023 due to rising interest rates and economic uncertainty.
• However, Provident Bancorp operates in a niche market and is well-positioned to benefit from its strong deposit franchise and local relationships.
• The acquisition of Heritage Financial Group is expected to provide additional growth opportunities and diversify the bank's revenue streams.

Strengths

• Strong Deposit Franchise: Provident Bancorp has a strong deposit base in its local markets, which provides a stable source of funding.
• Experienced Management Team: The bank is led by an experienced management team with a proven track record of success.
• Excellent Credit Quality: Provident Bancorp has maintained excellent credit quality with low non-performing loans.
• Commitment to Innovation: The bank is investing heavily in technology and digital banking solutions to meet changing customer needs.

Weaknesses

• Geographic Concentration: Provident Bancorp's operations are primarily concentrated in the Midwest, which could limit its growth opportunities.
• Competition: The bank faces competition from larger regional and national banks, as well as fintech companies.
• Economic Headwinds: The current economic uncertainty could adversely impact the bank's loan growth and asset quality.

Overall Outlook

Provident Bancorp is a well-positioned regional bank with a strong financial foundation and a commitment to innovation. The acquisition of Heritage Financial Group provides growth opportunities and diversification. While the banking industry faces challenges, Provident Bancorp is expected to remain profitable and continue to generate shareholder value.

Disclaimer: The information provided in this outlook is based on publicly available sources and is subject to change. Analysts' estimates and industry forecasts may vary.

Companies Similar to Provident Bancorp

1. M&T Bank

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  • Large regional bank with a wide range of financial products and services
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5. Capital One Financial

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History of Provident Bancorp

1835:

• Founded as Provident Savings Institution in Cincinnati, Ohio.
• Focused on providing savings and loan services to local depositors.

1840s-1870s:

• Expanded into neighboring counties and established branches.
• Played a role in financing the growth of Cincinnati during the industrial revolution.

1880s-1920s:

• Continued to expand and became one of the largest savings and loan associations in the Midwest.
• Survived the financial panics of 1893 and 1907.

1930s-1950s:

• Faced challenges during the Great Depression and World War II.
• Implemented federal deposit insurance to protect depositors.

1960s-1970s:

• Began offering a wider range of financial services, including checking accounts and commercial loans.
• Opened new branches and expanded into northern Kentucky.

1980s-1990s:

• Became a publicly traded company and acquired several other financial institutions.
• Expanded into Indiana and Michigan.

2000s:

• Continued to grow through acquisitions and organic growth.
• Expanded into Illinois, Tennessee, and Alabama.

2010s:

• Became a leader in digital banking and technology investments.
• Acquired more banks and expanded its geographic footprint.

2020s:

• Continued to focus on digital transformation and customer service.
• Expanded into new markets through acquisitions, including Rhode Island and New Jersey.

Today, Provident Bancorp is a publicly traded financial services company with over $13 billion in assets. It operates over 100 branches and provides a wide range of banking and financial services to individuals and businesses.

2020

• January 2020: Provident Bancorp announces the acquisition of The Mercantile Bank and Trust Company of South Bend, Indiana.
• March 2020: Provident Bancorp announces a $100 million stock repurchase program.
• October 2020: Provident Bancorp announces the opening of a new branch in Columbus, Ohio.

2021

• January 2021: Provident Bancorp reports record earnings for the fourth quarter and full year 2020.
• March 2021: Provident Bancorp announces a $50 million stock repurchase program.
• June 2021: Provident Bancorp announces the acquisition of Centier Bank, a community bank with 62 branches in Indiana and Michigan.

2022

• January 2022: Provident Bancorp reports strong earnings for the fourth quarter and full year 2021.
• March 2022: Provident Bancorp announces a $100 million stock repurchase program.
• June 2022: Provident Bancorp announces the acquisition of First Merchants Corporation, a community bank with 127 branches in Indiana, Illinois, Ohio, and Michigan.

Recent Timelines

• August 2022: Provident Bancorp announces the completion of the acquisition of First Merchants Corporation.
• September 2022: Provident Bancorp announces a new $150 million stock repurchase program.
• October 2022: Provident Bancorp reports strong earnings for the third quarter of 2022.

Exceptional Banking Experience with Provident Bancorp

I am delighted to share my overwhelmingly positive experience with Provident Bancorp, a leading financial institution known for its exceptional customer service and innovative products. As a loyal customer for over five years, I have consistently been impressed by their unwavering commitment to meeting my financial needs.

Outstanding Customer Service

From the moment I opened my account, I was greeted with warmth and professionalism. The friendly staff members are always available to assist me with any questions or concerns. They go above and beyond to ensure that my experience is seamless and enjoyable.

Innovative Banking Solutions

Provident Bancorp is at the forefront of financial technology. Their mobile and online banking platforms are user-friendly and allow me to manage my accounts conveniently from anywhere. They also offer a wide range of products tailored to meet my specific financial goals, including competitive rates on loans and savings accounts.

Personalized Advice

I appreciate the personalized financial advice I receive from my dedicated Wealth Manager. They take the time to understand my individual circumstances and provide tailored recommendations that have helped me achieve my financial objectives.

Community Involvement

Provident Bancorp is deeply committed to supporting the communities it serves. They sponsor various local events and initiatives, contributing to the overall well-being and growth of the region.

Stability and Financial Strength

As a publicly traded company, Provident Bancorp has a proven track record of stability and financial strength. I feel confident that my funds are safe and secure with them.

Conclusion

I highly recommend Provident Bancorp to anyone seeking a reliable and customer-centric financial partner. Their exceptional customer service, innovative banking solutions, personalized advice, community involvement, and stability make them my go-to choice for all my banking needs. I am grateful for their unwavering support and look forward to continuing our partnership for many years to come.

Discover the Advantages of Provident Bancorp: Your Source for Financial Solutions

In today's ever-evolving financial landscape, finding a reliable and comprehensive banking partner is crucial. Provident Bancorp stands out as a trusted provider of innovative banking solutions tailored to meet the diverse needs of individuals, businesses, and communities.

Our Promise of Excellence:

At Provident Bancorp, we are committed to delivering exceptional customer experiences. Our core values guide everything we do:

• Integrity: We uphold the highest ethical standards in all our dealings.
• Innovation: We continuously explore new technologies and solutions to meet the evolving needs of our clients.
• Collaboration: We foster strong relationships with our customers and partners to achieve mutually beneficial outcomes.
• Community: We are actively involved in supporting the communities we serve.

A Range of Services to Meet Your Needs:

Whether you're an individual looking for personal banking services, a business seeking financial solutions, or a community organization seeking support, Provident Bancorp has a comprehensive suite of products and services designed to meet your specific requirements.

Our services include:

• Personal banking: Checking accounts, savings accounts, mortgages, and more
• Business banking: Commercial lending, cash management, and treasury services
• Wealth management: Investment advisory services, estate planning, and trust administration
• Community development: Low-income housing programs, small business loans, and community grants

Why Choose Provident Bancorp?

• Financial Stability: As a top-rated financial institution with a strong capital position, we provide peace of mind and security to our customers.
• Personalized Service: Our experienced bankers offer personalized guidance and tailored solutions to help you achieve your financial goals.
• Technology-Driven Solutions: We leverage the latest technology to provide convenient and efficient online and mobile banking services.
• Local Presence: With over 120 branches and numerous ATMs in the Northeast, we are committed to serving our communities.
• Community Involvement: We are actively engaged in supporting local organizations and initiatives that make a positive impact.

Visit Our Website Today:

To learn more about Provident Bancorp and explore the range of financial solutions we offer, visit our website at [Website Link]. Our website provides comprehensive information on our products, services, and commitment to our customers and communities.

Experience the Provident Bancorp difference and embark on a journey towards financial success. Let us be your trusted partner in achieving your financial goals.

Provider Name: FIS (Fidelity National Information Services, Inc.)

Website: www.fisglobal.com

Services Provided:

• Core Banking System: FIS provides Provident Bancorp with its core banking system, which handles essential banking operations such as account management, transactions, and reporting.
• Digital Banking Platform: FIS's digital banking platform allows Provident Bancorp to offer online and mobile banking services to its customers, enabling them to manage their accounts, make payments, and access account information remotely.
• Payment Processing: FIS processes payment transactions for Provident Bancorp, including credit card payments, ACH transfers, and wire transfers.
• Fraud Detection and Prevention: FIS provides fraud detection and prevention solutions to help Provident Bancorp identify and mitigate fraudulent activity.
• Data Analytics and Reporting: FIS offers data analytics and reporting tools that allow Provident Bancorp to gain insights into its operations, customer behavior, and financial performance.
• Managed Services: FIS provides managed services for Provident Bancorp's IT infrastructure, including data center operations, network management, and application support.
• Other Services: FIS also provides other services to Provident Bancorp, such as check processing, ATM management, and regulatory compliance support.

Additional Information:

FIS is a global provider of financial technology and services. It serves over 20,000 financial institutions worldwide, including banks, credit unions, and investment firms. FIS has a strong partnership with Provident Bancorp and has been providing core banking and other services to the company for many years.

Provident Bancorp, Inc. is a bank holding company headquartered in Jersey City, New Jersey. It is the parent company of Provident Bank, a community bank with branches in New Jersey, New York, and Pennsylvania.

Main Customers (Downstream Companies)

Provident Bancorp's main customers are primarily small businesses and individuals in the communities it serves. The bank provides a range of products and services, including:

• Commercial banking: loans, lines of credit, cash management, and other services for small businesses
• Personal banking: checking and savings accounts, mortgages, and other services for individuals
• Wealth management: investment management, retirement planning, and other services for high-net-worth individuals

Specific Examples

Some of Provident Bancorp's notable customers include:

• The Cooper Union: a private university located in New York City
• Rowan University: a public university located in Glassboro, New Jersey
• The New Jersey Performing Arts Center: a performing arts center located in Newark, New Jersey
• The Statue of Liberty-Ellis Island Foundation: a non-profit organization that operates and maintains the Statue of Liberty and Ellis Island
• The New York Giants: a professional football team based in East Rutherford, New Jersey

These are just a few examples of Provident Bancorp's main customers. The bank serves a diverse range of customers, including businesses, individuals, and non-profit organizations.

Websites

• Provident Bancorp: https://www.providentnj.com/
• Provident Bank: https://www.provident.bank/

Provident Bancorp, Inc. is a financial holding company headquartered in Jersey City, New Jersey. The company operates as a community bank holding company and provides various banking and financial services to businesses and individuals in the United States.

Key Revenue Streams

The key revenue streams for Provident Bancorp are as follows:

1. Net Interest Income:

   • This is the difference between the interest earned on loans and investments and the interest paid on deposits and other liabilities.
   • It is the largest revenue stream for Provident Bancorp, accounting for the majority of its total revenue.
   • In 2022, Provident Bancorp generated $1.4 billion in net interest income.

2. Non-Interest Income:

   • This includes revenue from fees and commissions, such as:
     • Loan origination fees
     • Service charges on deposit accounts
     • Trust fees
     • Investment banking fees
     • Mortgage banking fees
   • In 2022, Provident Bancorp generated $375.3 million in non-interest income.

Estimated Annual Revenue

For the year ended December 31, 2022, Provident Bancorp reported total revenue of $1.8 billion. This represents an increase of approximately 8.1% from the previous year.

Additional Information

Provident Bancorp's revenue streams are geographically diversified, with the majority of its revenue coming from the New York metropolitan area, New Jersey, and Pennsylvania. The company also has a presence in Connecticut, Massachusetts, and Rhode Island.

Provident Bancorp's revenue is also diversified by customer type. The company serves a wide range of customers, including individuals, small businesses, middle-market businesses, and large corporations.

The company's strong financial performance is due to a number of factors, including:

• Its focus on providing high-quality customer service
• Its conservative lending practices
• Its strong capital position
• Its experienced management team

Key Partners of Provident Bancorp

Provident Bancorp, Inc. partners with various organizations to provide a range of financial services and enhance its operations. Here are some of the key partners of Provident Bancorp:

1. Fiserv, Inc.

• Website: https://www.fiserv.com/
• Description: Fiserv is a leading provider of financial technology solutions for banks, credit unions, and other financial institutions. Provident Bancorp utilizes Fiserv's platform for core banking, payments processing, and other technology services.

2. Fiserv Capital Markets

• Website: https://www.fiservcapitalmarkets.com/
• Description: Fiserv Capital Markets is a broker-dealer and investment banking firm that provides a range of financial services to financial institutions, including Provident Bancorp.

3. Fannie Mae

• Website: https://www.fanniemae.com/
• Description: Fannie Mae is a government-sponsored enterprise that provides liquidity to the mortgage market by purchasing and guaranteeing mortgage loans. Provident Bancorp originates and sells mortgage loans to Fannie Mae, which helps increase the availability of mortgage financing for homebuyers.

4. Freddie Mac

• Website: https://www.freddiemac.com/
• Description: Freddie Mac is another government-sponsored enterprise that provides liquidity to the mortgage market by purchasing and guaranteeing mortgage loans. Provident Bancorp also originates and sells mortgage loans to Freddie Mac.

5. Federal Home Loan Bank of New York (FHLBNY)

• Website: https://www.fhlbny.com/
• Description: FHLBNY is a regional cooperative bank that provides funding and other financial services to its member institutions, including Provident Bancorp.

6. Mastercard International Incorporated

• Website: https://www.mastercard.com/
• Description: Mastercard is a global payment technology company that provides credit, debit, and prepaid cards and other payment solutions. Provident Bancorp partners with Mastercard to offer its customers credit and debit card services.

7. Qualtrics International Inc.

• Website: https://www.qualtrics.com/
• Description: Qualtrics is a provider of cloud-based experience management software. Provident Bancorp leverages Qualtrics' platform to gather customer feedback and improve its customer experience.

8. Shift Technology

• Website: https://www.shift-technology.com/
• Description: Shift Technology is a provider of AI-powered fraud detection and claims automation solutions for insurance companies. Provident Bancorp partners with Shift Technology to enhance its insurance fraud detection capabilities.

9. Zafin Labs Inc.

• Website: https://www.zafin.com/
• Description: Zafin is a provider of cloud-based regulatory compliance software for financial institutions. Provident Bancorp utilizes Zafin's platform to manage its regulatory compliance obligations.

Key Cost Structure of Provident Bancorp

1. Interest Expense

• Estimated annual cost: $1.2 billion
• This is the cost of funds that Provident Bancorp borrows from depositors and other lenders.
• It is the largest expense item for the company, accounting for approximately 50% of total expenses.

2. Salaries and Benefits

• Estimated annual cost: $600 million
• This includes the salaries and benefits paid to employees, such as wages, bonuses, and health insurance.
• It is the second largest expense item for the company, accounting for approximately 25% of total expenses.

3. Occupancy and Equipment

• Estimated annual cost: $200 million
• This includes the cost of rent, utilities, and maintenance for the company's offices and other facilities.
• It also includes the cost of purchasing and maintaining computers and other equipment.

4. FDIC Insurance

• Estimated annual cost: $100 million
• This is the cost of the insurance that Provident Bancorp pays to the Federal Deposit Insurance Corporation (FDIC).
• The FDIC insures deposits up to $250,000 per depositor.

5. Other Expenses

• Estimated annual cost: $100 million
• This includes a variety of other expenses, such as marketing, advertising, and legal fees.
• It also includes the cost of maintaining the company's regulatory compliance.

Total Estimated Annual Cost: $2.2 billion

Note: These are just estimates, and the actual costs may vary depending on a number of factors, such as interest rates, economic conditions, and regulatory changes.

Sales Channels:

Provident Bancorp primarily generates revenue through the following sales channels:

1. Branch Network:

• Operates a network of over 90 branches in Maryland, Virginia, and Pennsylvania.
• Branches offer traditional banking services such as deposit accounts, loans, and financial planning.

2. Online and Mobile Banking:

• Provides online and mobile banking platforms to its customers.
• Allows customers to access their accounts, make payments, and conduct other banking transactions remotely.

3. Commercial Lending:

• Offers commercial loans to businesses of various sizes.
• Provides financing for equipment purchases, working capital, and other business needs.

4. Wealth Management:

• Provides wealth management services to high-net-worth individuals and families.
• Includes investment advisory services, trust and estate planning, and financial consulting.

5. Mortgage Lending:

• Originates and sells residential mortgages to individuals and families.
• Offers various mortgage products, including fixed-rate, adjustable-rate, and jumbo loans.

Estimated Annual Sales:

Provident Bancorp has not explicitly disclosed the annual sales for each of its sales channels. However, based on its financial statements and industry data, estimated annual sales for each channel are as follows:

Channel | Estimated Annual Sales ---|---| Branch Network | $1.2 billion Online and Mobile Banking | $500 million Commercial Lending | $1.5 billion Wealth Management | $300 million Mortgage Lending | $600 million

Total Estimated Annual Sales: $4.1 billion

It's important to note that these estimates are based on various factors, including historical sales data, industry trends, and economic conditions. The actual sales may vary from these estimates.

Provident Bancorp's Customer Segments and Estimated Annual Sales

Provident Bancorp, Inc. is a bank holding company that offers various financial products and services to individuals, businesses, and municipalities. The company operates through multiple segments, each catering to specific customer groups.

1. Retail Banking

• Customer Segment: Individuals and small businesses
• Estimated Annual Sales: $1.5 billion

This segment provides a range of retail banking products and services, including checking accounts, savings accounts, loans, and mortgages. Provident Bancorp has a strong presence in the New York metropolitan area and serves customers through its branch network and online banking channels.

2. Commercial Banking

• Customer Segment: Middle-market businesses and commercial real estate investors
• Estimated Annual Sales: $2.0 billion

The commercial banking segment offers a comprehensive suite of financial services tailored to the needs of businesses, including commercial loans, equipment financing, and cash management services. Provident Bancorp focuses on building long-term relationships with its commercial clients.

3. Wealth Management

• Customer Segment: High-net-worth individuals and families
• Estimated Annual Sales: $1.0 billion

Provident Bancorp offers bespoke wealth management services through its Private Bank and Trust division. This segment provides personalized investment solutions, financial planning, and estate planning to help clients manage their wealth.

4. Municipal Banking

• Customer Segment: State and local government entities
• Estimated Annual Sales: $0.5 billion

The municipal banking segment offers specialized financial solutions to meet the needs of state and local governments, including financing for infrastructure projects and debt management services. Provident Bancorp has a long history of serving municipalities in its operating markets.

5. Other

• Customer Segment: Miscellaneous
• Estimated Annual Sales: $0.25 billion

This segment includes income from insurance brokerage, mortgage servicing, and other ancillary financial services offered by Provident Bancorp.

Total Estimated Annual Sales: $5.25 billion

It is important to note that these are estimated annual sales figures based on publicly available information and industry data. Actual sales may vary depending on market conditions and other factors.

Value Proposition of Provident Bancorp

Provident Bancorp, Inc. (PB) is a financial services company offering a range of banking, investment, and insurance products and services to individuals and businesses. The company's value proposition is built around the following key elements:

1. Customer-Centric Approach: Provident Bancorp places a strong emphasis on providing personalized and tailored solutions that meet the specific needs of its customers. The company has a strong understanding of the local markets it serves and works closely with its customers to develop financial plans and strategies that align with their financial goals.

2. Comprehensive Product Suite: Provident Bancorp offers a wide range of products and services to cater to the diverse financial needs of its customers. These include:

• Banking: Checking and savings accounts, loans (mortgage, auto, etc.), credit cards, and wealth management services
• Investment: Brokerage services, investment management, and financial planning
• Insurance: Property and casualty insurance, life insurance, and health insurance

3. Local Expertise: Provident Bancorp has a network of local branches and offices that allows it to provide personalized services to its customers. The company's employees are knowledgeable about the local markets and are able to offer tailored advice and solutions to their customers.

4. Strong Financial Performance: Provident Bancorp has a proven track record of strong financial performance. The company has consistently generated solid revenue growth and has maintained a strong balance sheet and capital position. This financial stability allows the company to provide its customers with the peace of mind that their financial needs will be met.

5. Commitment to Community: Provident Bancorp is deeply committed to the communities it serves. The company invests heavily in local organizations and programs that support education, the arts, and community development. This commitment to community building helps to differentiate the company from its competitors and fosters long-term customer relationships.

Target Audience:

Provident Bancorp primarily targets individuals and small businesses in the communities it serves. The company's focus on personalized service and local expertise resonates particularly well with customers who value personal relationships and tailored financial solutions.

Competitive Advantages:

• Strong local presence and deep understanding of local markets
• Comprehensive product suite to meet diverse customer needs
• Proven track record of financial performance and stability
• Commitment to customer-centric approach and personalized service
• Investment in community engagement and support

Provident Bancorp, Inc. (PVBC)

Overview

Provident Bancorp, Inc. is a financial holding company headquartered in Jersey City, New Jersey. It operates through its subsidiaries, including Provident Bank, which provides a range of banking products and services to individuals, businesses, and municipalities.

Risks

Provident Bancorp faces a number of risks, including:

Credit Risk

Provident Bancorp is exposed to credit risk, which is the risk that its borrowers may default on their loans. This risk is particularly significant for the company's commercial real estate lending portfolio, which accounted for approximately 57% of its total loans as of December 31, 2022. A downturn in the commercial real estate market could lead to an increase in loan defaults and losses for Provident Bancorp.

Interest Rate Risk

Provident Bancorp is also exposed to interest rate risk, which is the risk that changes in interest rates will affect the value of its assets and liabilities. The company's net interest margin, which is the difference between the interest it earns on its loans and the interest it pays on its deposits, is sensitive to changes in interest rates. A rise in interest rates could reduce Provident Bancorp's net interest margin and profitability.

Liquidity Risk

Provident Bancorp faces liquidity risk, which is the risk that it may not be able to meet its financial obligations when they come due. The company's liquidity is dependent on its ability to access funding from various sources, including deposits, borrowings, and sales of assets. A disruption in these funding sources could lead to liquidity problems for Provident Bancorp.

Operational Risk

Provident Bancorp is also exposed to operational risk, which is the risk of losses resulting from internal processes, people, and systems. This risk includes the risk of fraud, errors, and technology failures. A significant operational risk event could damage Provident Bancorp's reputation and financial performance.

Compliance Risk

Provident Bancorp is subject to a variety of laws and regulations, including those governing banking, lending, and consumer protection. Failure to comply with these laws and regulations could result in fines, penalties, and reputational damage.

Mitigating Factors

Provident Bancorp has implemented a number of measures to mitigate these risks, including:

• Maintaining a diversified loan portfolio
• Managing its interest rate risk through hedging strategies
• Maintaining a strong liquidity position
• Implementing robust internal controls and risk management systems
• Conducting ongoing compliance reviews

Conclusion

Provident Bancorp is exposed to a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, and compliance risk. However, the company has implemented a number of measures to mitigate these risks and maintain its financial stability.