Provident Bancorp, Inc. Reports Results for the March 31, 2023 Quarter.

AMESBURY, Mass: Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for BankProv (the "Bank"), reported net income for the quarter ended March 31, 2023 of $2.1 million, or $0.13 per diluted share, compared to $2.7 million, or $0.16 per diluted share, for the quarter ended December 31, 2022 and $5.5 million, or $0.32 per diluted share, for the quarter ended March 31, 2022.

In announcing these results, Carol Houle, Co-President and Co-Chief Executive Officer and Chief Financial Officer said, "Heading into the first quarter our primary objective was the development and implementation of a renewed strategic direction. We are pleased that our financial results met our expectations and are proud of the hard work and dedication of our employees in their efforts to achieve our objectives."

"The high-profile failures of a few large financial institutions had widespread impacts during the first quarter of 2023. The importance of liquidity, diversification, and deposit insurance was thrust into the spotlight and in response, we took decisive action to reaffirm our secure position in each of these areas and to reassure our customers of the safety of their deposits. We are happy that our institution was able to weather much of the negative fallout and are extremely thankful for the continued support of our customers and communities." said Joe Reilly, Co-Chief Executive Officer.

Liquidity and Capital Resources

During the first quarter of 2023, failures of two large financial institutions resulted in increased scrutiny on the balance sheets and liquidity positions of financial institutions across the industry. BankProv was well insulated from the fallout that resulted from the market turmoil and did not experience significant deposit outflow. We believe this resulted from the following:

The Bank's deposit and loan portfolios were and continue to be well-diversified;

As of March 31, 2023 the Federal Deposit Insurance Fund ("FDIC") insured 56% of our customers' deposits and the remaining 44% were insured through the Depositors Insurance Fund ("DIF");

We have access to multiple funding sources and sufficient capacity to borrow, if needed, as of March 31, 2023 between the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston's borrower-in-custody program, we had the ability to borrow an additional $249.6 million;

Our securities portfolio represented only 1.7% of total assets, as of March 31, 2023 and the accumulated other comprehensive loss on the portfolio was $1.6 million, or 0.7% of stockholders' equity as of that date. Management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Based on our ability to borrow, cash position and low deposit outflows there is no expected reliance on security sales to meet operational needs.

Income Statement Results

Quarter Ended March 31, 2023 Compared to Quarter Ended December 31, 2022

For the quarter ended March 31, 2023, net interest and dividend income was $15.8 million, which represents a decrease of $2.9 million, or 15.6%, when compared to the quarter ended December 31, 2022. Net interest and dividend income was negatively impacted by an increase in interest expense of $2.5 million, or 111.7%, to $4.8 million compared to $2.3 million for the quarter ended December 31, 2022 as well as a decrease in interest and...