Provident Bancorp's Net Income Soars Amidst Merger Ahead

TL;DR

**Provident Bancorp is posting strong earnings right before its acquisition, making it a solid exit for shareholders.**

AI Summary

Provident Bancorp, Inc. reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the three months rose to $2.67 million, up from $0.716 million in the prior year, representing a 273% increase. For the nine months, net income surged to $7.664 million, compared to $2.389 million in 2024, a 220% increase. This was primarily driven by a substantial credit loss benefit of $0.418 million for the three months and $0.808 million for the nine months, a reversal from credit loss expenses of $1.693 million and $2.570 million in the respective prior periods. Net interest and dividend income also increased to $13.186 million for the three months and $39.588 million for the nine months, up from $12.409 million and $36.848 million, respectively. Total assets decreased to $1.491 billion at September 30, 2025, from $1.593 billion at December 31, 2024, largely due to a reduction in total loans from $1.326 billion to $1.271 billion and a decrease in total deposits from $1.308 billion to $1.232 billion. The company is also in the process of being acquired by NB Bancorp, Inc., with the merger expected to close around November 15, 2025, which will result in the company ceasing to exist as a separate legal entity.

Why It Matters

This filing is critical for investors as Provident Bancorp, Inc. is on the cusp of a merger with NB Bancorp, Inc., expected to close around November 15, 2025. The significant increase in net income and the credit loss benefit could indicate a stronger financial position for the company leading into the acquisition, potentially influencing the final valuation or investor sentiment around the deal's terms. For employees, the merger means integration into Needham Bank, which could bring changes in roles and corporate culture. Customers will transition to Needham Bank, impacting their banking services and potentially offering new product access. In the broader market, this acquisition reduces the number of independent regional banks, continuing the trend of consolidation in the financial sector and potentially increasing competitive pressure among remaining players.

Risk Assessment

Risk Level: medium — The primary risk is the impending merger with NB Bancorp, Inc., expected to close around November 15, 2025. While regulatory approvals have been received, the filing explicitly states, 'The Company will cease to exist as a separate legal entity after the Merger,' and 'these financial statements were prepared on a going concern basis and not on the liquidation basis of accounting.' This indicates inherent uncertainty regarding the finalization of customary closing conditions and the operational transition.

Analyst Insight

Investors should evaluate the merger terms carefully, specifically the election to receive either 0.691 shares of NB Bancorp's common stock or $13.00 in cash, subject to proration. Given the strong pre-merger financial performance, existing shareholders should consider holding their shares to realize the merger consideration, while new investors should assess NB Bancorp's prospects post-acquisition.

Financial Highlights

revenue

$13.186M

total Assets

$1.491B

total Debt

$7.462M

net Income

$2.67M

cash Position

$128.881M

revenue Growth

+6.3%

Revenue Breakdown

Key Numbers

• $2.67M — Net income for Q3 2025 (Increased 273% from $0.716M in Q3 2024)
• $7.664M — Net income for YTD Q3 2025 (Increased 220% from $2.389M in YTD Q3 2024)
• $0.418M — Credit loss benefit for Q3 2025 (Compared to $1.693M credit loss expense in Q3 2024)
• $0.808M — Credit loss benefit for YTD Q3 2025 (Compared to $2.570M credit loss expense in YTD Q3 2024)
• $1.491B — Total assets at Sep 30, 2025 (Decreased from $1.593B at Dec 31, 2024)
• $1.271B — Total loans at Sep 30, 2025 (Decreased from $1.326B at Dec 31, 2024)
• $1.232B — Total deposits at Sep 30, 2025 (Decreased from $1.308B at Dec 31, 2024)
• 0.691 — Shares of Buyer's common stock (Stock consideration per Provident share in merger)
• $13.00 — Cash consideration per Provident share (Cash consideration per Provident share in merger)
• 17,782,946 — Shares of common stock outstanding (As of November 3, 2025)

Key Players & Entities

• Provident Bancorp, Inc. (company) — Registrant and target in merger
• NB Bancorp, Inc. (company) — Acquiring company in merger
• BankProv (company) — Wholly owned subsidiary of Provident Bancorp, Inc.
• Needham Bank (company) — Wholly owned subsidiary of NB Bancorp, Inc.
• Securities and Exchange Commission (regulator) — Regulator for 10-Q filing
• September 30, 2025 (date) — End of the reporting period for the 10-Q
• November 15, 2025 (date) — Expected completion date of the merger
• Maryland (location) — State of incorporation for Provident Bancorp, Inc.
• Amesbury, Massachusetts (location) — Headquarters of BankProv
• NASDAQ Stock Market LLC (company) — Exchange where PVBC common stock is registered

FAQ

Risk Factors

• Credit Loss Reversal Impact [medium — financial]: The significant shift from credit loss expense in prior periods to a credit loss benefit in the current periods ($1.693M expense in Q3 2024 vs. $0.418M benefit in Q3 2025) is a primary driver of the net income increase. This reversal masks underlying loan portfolio performance and could be sensitive to economic downturns.
• Interest Rate Sensitivity [medium — market]: While net interest income increased, the company's balance sheet is subject to interest rate fluctuations. Changes in market interest rates can impact the net interest margin and the fair value of investment securities.
• Merger Integration [high — operational]: The pending acquisition by NB Bancorp, Inc. introduces operational risks related to integration, potential disruption to business, and retention of key personnel. The merger is expected to close around November 15, 2025.
• Regulatory Approvals for Merger [medium — regulatory]: The merger has received all required regulatory approvals as of October 20, 2025. However, any unforeseen regulatory changes or challenges could impact the completion or terms of the transaction.
• Deposit and Loan Portfolio Changes [medium — financial]: Total assets decreased to $1.491 billion from $1.593 billion, driven by reductions in total loans ($1.271B from $1.326B) and total deposits ($1.232B from $1.308B). This contraction may indicate a strategic shift or a response to market conditions.

Industry Context

The banking industry is characterized by intense competition, stringent regulatory oversight, and sensitivity to macroeconomic factors like interest rates and economic growth. Community banks like Provident Bancorp often focus on local markets and relationship banking. Consolidation through mergers and acquisitions is a common trend, driven by the need for scale, technological investment, and diversification.

Regulatory Implications

As a financial institution, Provident Bancorp is subject to extensive regulation by federal and state authorities, including capital requirements, lending standards, and consumer protection laws. The pending merger requires approval from banking regulators, and the combined entity will operate under these frameworks.

What Investors Should Do

1. Monitor merger progress
2. Analyze the sustainability of net income growth
3. Evaluate the impact of asset and deposit contraction
4. Consider the merger consideration mix

Key Dates

• 2025-06-05: Agreement and Plan of Merger signed — Initiated the process for acquisition by NB Bancorp, Inc.
• 2025-09-16: Provident stockholders approved the Merger — Key shareholder approval obtained for the acquisition.
• 2025-09-30: End of Q3 2025 reporting period — Financial results for the nine months and third quarter of 2025 are reported.
• 2025-10-20: Joint announcement of all required regulatory approvals received — Cleared a major hurdle for the completion of the merger.
• 2025-11-03: Date of shares outstanding disclosure — Provides the latest count of issued and outstanding common stock.
• 2025-11-15: Expected merger closing date — Provident Bancorp, Inc. will cease to exist as a separate entity.

Glossary

Credit loss benefit

A reduction in the provision for loan losses, indicating an improvement in the expected collectibility of loans or a recovery of previously written-off amounts. (This benefit significantly boosted net income in the current period, reversing prior period expenses.)

Net interest and dividend income

The difference between the interest and dividend income earned on assets and the interest expense paid on liabilities. (A core measure of profitability for banks, showing an increase in the current periods.)

Stock Consideration

The portion of the merger consideration paid to shareholders in the form of the acquiring company's stock. (Shareholders can elect to receive this or cash as part of the acquisition by NB Bancorp, Inc.)

Cash Consideration

The portion of the merger consideration paid to shareholders in the form of cash. (Shareholders can elect to receive this or stock as part of the acquisition by NB Bancorp, Inc.)

Allowance for credit losses for loans

An estimate of the amount of uncollectible loans in a financial institution's loan portfolio. (The change in this allowance, specifically the benefit recognized, is a key driver of current period profitability.)

Year-Over-Year Comparison

Compared to the prior year, Provident Bancorp, Inc. has shown a dramatic improvement in profitability, with net income for the three and nine months ended September 30, 2025, increasing by 273% and 220%, respectively. This surge is primarily due to a significant reversal from credit loss expenses to a credit loss benefit. While net interest and dividend income also saw modest increases, total assets, loans, and deposits have decreased, indicating a contraction in the balance sheet. The company is also in the final stages of being acquired, which will fundamentally change its structure.

Key Financial Figures

• $0.01 — hares of the Registrant's common stock, $0.01 par value per share, outstanding. Tabl
• $5.8 million — 4 . Securities with carrying amounts of$5.8 million and $ 6.6 million were pledged to secur

Filing Documents

• pvbc20250930_10q.htm (10-Q) — 3371KB
• ex_855504.htm (EX-31.1) — 12KB
• ex_855505.htm (EX-31.2) — 12KB
• ex_855506.htm (EX-32) — 7KB
• 0001437749-25-033757.txt ( ) — 14979KB
• pvbc-20250930.xsd (EX-101.SCH) — 66KB
• pvbc-20250930_cal.xml (EX-101.CAL) — 69KB
• pvbc-20250930_def.xml (EX-101.DEF) — 547KB
• pvbc-20250930_lab.xml (EX-101.LAB) — 476KB
• pvbc-20250930_pre.xml (EX-101.PRE) — 588KB
• pvbc20250930_10q_htm.xml (XML) — 3963KB

Financial Statements

Financial Statements 2 Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 2 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 3 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 4 Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited) 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operation

Management's Discussion and Analysis of Financial Condition and Results of Operation 30 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 40 Item 4.

Controls and Procedures

Controls and Procedures 40 Part II. Other Information 41 Item 1.

Legal Proceedings

Legal Proceedings 41 Item 1A.

Risk Factors

Risk Factors 41 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 3. Defaults upon Senior Securities 41 Item 4. Mine Safety Disclosures 41 Item 5. Other Information 41 Item 6. Exhibits 42

Signatures

Signatures 43 Table of Contents

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements PROVIDENT BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) At September 30, 2025 At December 31, 2024 (unaudited) Assets Cash and due from banks $ 19,373 $ 27,536 Short-term investments 109,508 141,606 Cash and cash equivalents 128,881 169,142 Debt securities available-for-sale (at fair value) 24,441 25,693 Federal Home Loan Bank stock, at cost 1,004 2,697 Total loans 1,271,378 1,326,595 Allowance for credit losses for loans ( 20,414 ) ( 21,087 ) Net loans 1,250,964 1,305,508 Bank owned life insurance 47,028 46,017 Premises and equipment, net 10,062 10,188 Accrued interest receivable 4,210 5,296 Right-of-use assets 5,431 3,429 Deferred tax asset, net 11,890 13,808 Other assets 7,712 11,392 Total assets $ 1,491,623 $ 1,593,170 Deposits: Noninterest-bearing $ 280,288 $ 351,528 Interest-bearing 952,103 957,432 Total deposits 1,232,391 1,308,960 Borrowings: Short-term borrowings 3,000 35,000 Long-term borrowings 4,462 9,563 Total borrowings 7,462 44,563 Operating lease liabilities 5,900 3,862 Commitments and contingencies — — Other liabilities 4,841 4,698 Total liabilities 1,250,594 1,362,083 Shareholders' equity: Preferred stock, $ 0.01 par value, 50,000 shares authorized; no shares issued and outstanding — — Common stock, $ 0.01 par value, 100,000,000 shares authorized; 17,782,946 and 17,788,543 shares issued and outstanding at September 30, 2025 and December 31, 2024 178 178 Additional paid-in capital 126,772 125,446 Retained earnings 121,225 113,561 Accumulated other comprehensive loss ( 1,212 ) ( 1,625 ) Unearned compensation - ESOP ( 5,934 ) ( 6,473 ) Total shareholders' equity 241,029 231,087 Total liabilities and shareholders' equity $ 1,491,623 $ 1,593,170 The accompanying notes are an integral part of the unaudited consolidated financial statements. 2 Table of Contents PROVIDENT BANCORP, INC. CONSO

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) ( 1 ) Basis of Presentation The accompanying unaudited financial statements of Provident Bancorp, Inc. (the "Company") were prepared in accordance with the instructions for Form 10 -Q and with Regulation S- X and do not include information or footnotes necessary for a complete presentation of the financial condition, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles ("GAAP"). However, in the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for future periods, including the entire fiscal year. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in the annual report on Form 10 -K that the Company filed with the Securities and Exchange Commission (the "SEC") on March 31, 2025. The consolidated financial statements include the accounts of the Company, its wholly owned subsidiary BankProv (the "Bank"), and the Bank's wholly owned subsidiaries, Provident Security Corporation, and 5 Market Street Security Corporation. Provident Security Corporation and 5 Market Street Security Corporation were established to buy, sell, and hold investments for their own account. ( 2 ) Merger On June 5, 2025, NB Bancorp, Inc. (the "Buyer"), Needham Bank, a wholly-owned subsidiary of the Buyer, 1828 MS, Inc., a wholly owned subsidiary of the Buyer formed solely to facilitate the transaction (the "Merger Sub" and together with the Buyer and Needham Bank, "Needham"), the Company and the Bank, entered into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the terms and subject to the conditions set forth in the Merger Agree

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