SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended Commission File
March 31, 1995 No. 1-8019
P R O V I D E N T B A N C O R P , I N C .
Incorporated under IRS Employer I.D.
the Laws of Ohio No. 31-0982792
One East Fourth Street, Cincinnati, Ohio 45202
Phone: 513-579-2000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No ______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: Common
stock, without par value, at April 30, 1995 is 15,516,094.
Please address all correspondence to:
John R. Farrenkopf
Vice President and Chief Financial Officer
Provident Bancorp, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PROVIDENT BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
March 31, December 31,
ASSETS 1995 1994
Cash and Noninterest Bearing Deposits $157,194 $172,025
Federal Funds Sold and Reverse Repurchase Agreements 45,425 252,550
Investment Securities:
Held to Maturity (market value - $32,394 and $31,699) 32,394 31,699
Available for Sale (amortized cost - $685,257 and $679,310) 670,574 654,221
Loans (Net of Unearned Income):
Commercial Lending:
Commercial and Financial 1,943,077 1,878,351
Commercial Mortgage 427,295 420,222
Commercial Construction 186,114 172,190
Equipment Lease Financing 94,684 109,743
Consumer Lending:
Instalment 924,251 930,545
Residential 499,504 507,734
Lease Financing 210,740 185,753
Total Loans 4,285,665 4,204,538
Reserve for Possible Loan Losses (53,987) (51,979)
Net Loans 4,231,678 4,152,559
Premises and Equipment 73,647 64,210
Other Assets 87,415 84,227
$5,298,327 $5,411,491
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest Bearing $394,326 $452,458
Interest Bearing 3,678,751 3,616,191
Total Deposits 4,073,077 4,068,649
Short-Term Debt 395,852 521,707
Long-Term Debt 366,407 383,433
Accrued Interest and Other Liabilities 90,636 78,351
Total Liabilities 4,925,972 5,052,140
Shareholders' Equity:
Preferred Stock, 5,000,000 Shares Authorized, Series B,
371,418 Issued 37,000 37,000
Common Stock, No Par Value, $.67 Stated Value, 60,000,000
Shares Authorized, 15,645,249 and 15,639,849 Issued 10,431 10,427
Capital Surplus 107,506 107,264
Retained Earnings 220,200 210,355
Reserve for Retirement of Capital Securities 11,333 10,667
Treasury Stock, 147,209 and 4,487 Shares (4,648) (134)
Unrealized Losses on Marketable Securities
(net of deferred income tax) (9,467) (16,228)
Total Shareholders' Equity 372,355 359,351
$5,298,327 $5,411,491
PROVIDENT BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
1995 1994
Interest Income:
Interest and Fees on Loans:
Taxable $95,761 $66,287
Exempt From Federal Income Taxes 132 158
95,893 66,445
Interest on Investment Securities:
Taxable 9,305 8,895
Exempt From Federal Income Taxes 95 2
9,400 8,897
Interest on Federal Funds Sold and Reverse Repurchase Agreements 671 284
Total Interest Income 105,964 75,626
Interest Expense:
Interest on Deposits:
Savings and Demand Deposits 7,055 6,118
Time Deposits 40,391 18,225
Total Interest on Deposits 47,446 24,343
Interest on Short-Term Debt 5,792 3,979
Interest on Long-Term Debt 6,610 4,162
Total Interest Expense 59,848 32,484
Net Interest Income 46,116 43,142
Provision for Possible Loan Losses 2,000 3,000
Net Interest Income After Provision for Possible Loan Losses 44,116 40,142
Other Income:
Service Charges on Deposit Accounts 3,771 3,626
Other Service Charges and Fees 3,785 3,423
Gain on Sales of Loans 1,802 768
Security Gains - -
Other 1,437 1,619
Total Other Income 10,795 9,436
Other Expense:
Compensation:
Salaries 13,288 12,183
Benefits 2,450 2,272
Profit Sharing 806 745
Occupancy 2,147 1,951
Equipment Expense 2,303 1,881
Deposit Insurance 2,177 1,766
Other 9,171 7,964
Total Other Expense 32,342 28,762
Earnings Before Income Taxes 22,569 20,816
Applicable Income Taxes 7,569 7,113
Net Earnings $15,000 $13,703
Net Earnings Per Common Share:
Primary $.90 $.81
Fully Diluted .82 .75
Average Primary Shares 16,025 16,040
Average Fully Diluted Shares 18,346 18,361
PROVIDENT BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
Three Months Ended March 31,
1995 1994
Operating Activities:
Net Earnings $15,000 $13,703
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Provision for Possible Loan Losses 2,000 3,000
Provision for Depreciation and Amortization 2,721 2,458
Amortization of Investment Security Premiums (Discounts) (63) 274
Amortization of Unearned Income (4,850) (1,481)
Net (Increase) Decrease in Trading Securities (55) 154
Proceeds from Sale of Loans Held for Sale 14,107 44,177
Origination of Loans Held for Sale (13,387) (75,366)
Realized Gains on Loans Held for Sale (110) (755)
Realized Gains on Sale of Loans (1,692) (13)
Realized Investment Security Gains - -
Decrease in Interest Receivable 1,809 1,934
Increase in Accounts Receivable and Other Assets (6,260) (4,620)
Increase in Interest Payable 6,802 1,343
Decrease in Accounts Payable and Other Liabilities (7,264) (3,542)
Other 7,083 5,567
Net Cash Provided By (Used In) Operating Activities 15,841 (13,167)
Investing Activities:
Investment Securities Available for Sale:
Proceeds from Sales - -
Proceeds from Maturities and Prepayments 41,036 59,450
Purchases (46,925) (55,308)
Investment Securities Held to Maturity:
Proceeds from Sales - -
Proceeds from Maturities and Prepayments 850 755
Purchases (1,533) (11,850)
Net Increase in Loans and Leases (77,536) (87,872)
Proceeds from Sale of Other Real Estate 1,538 2,088
Purchases of Premises and Equipment (8,062) (2,646)
Proceeds from Sales of Premises and Equipment 182 254
Net Cash Used In Investing Activities (90,450) (95,129)
Financing Activities:
Net Decrease in Demand and Savings Deposits (104,830) (107,881)
Net Increase in Certificates of Deposit 109,258 589
Net Decrease in Short-Term Debt (125,855) (66,209)
Principal Payments on Long-Term Debt (17,049) (1,163)
Proceeds From Issuance of Long-Term Debt - 210,082
Cash Dividends Paid (4,487) (4,178)
Proceeds from Sale of Common Stock 1,476 -
Repurchase of Common Stock (5,860) -
Net Cash Provided By (Used In) Financing Activities (147,347) 31,240
Decrease in Cash and Cash Equivalents (221,956) (77,056)
Cash and Cash Equivalents at Beginning of Period 424,575 539,394
Cash and Cash Equivalents at End of Period $202,619 $462,338
Supplemental Disclosures of Cash Flow Information:
Cash Paid for:
Interest $53,046 $31,142
Income Taxes - 2,700
Non-Cash Activity:
Additions to Other Real Estate in Settlement of Loans 377 292
Transfer of Premises and Equipment to Other Real Estate - 101
PROVIDENT BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary for fair presentation. The
results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.
The financial statements presented herein should be read in
conjunction with the financial statements and notes thereto included
in Provident Bancorp, Inc.'s 1994 annual report on Form 10-K filed
with the Securities and Exchange Commission.
Basis of Presentation
The consolidated financial statements include the accounts of
Provident Bancorp, Inc. and its subsidiaries ("Bancorp"), all of which
are wholly owned. All significant intercompany balances and
transactions have been eliminated. Certain reclassifications have
been made to conform to the current year presentation.
The accompanying financial statements have been prepared in accordance
with the instructions to Form 10-Q and therefore do not include all
information and footnotes necessary to be in conformity with generally
accepted accounting principles.
Bancorp adopted Financial Accounting Standards Board("FASB") Statement
No. 114, "Accounting by Creditors for Impairment of a Loan", on
January 1, 1995. This statement requires a creditor to measure the
value of an impaired loan, as defined in the statement, based on the
present value of expected future cash flows discounted at the loan's
effective interest rate or, if more practical, at the loan's
observable market price or the fair value of the collateral, if the
loan is collateral dependent. Generally, interest income on impaired
loans is computed on the outstanding principal balance. Impaired loans
are generally placed on nonaccrual status when the payment of
principal and/or interest is past due 90 days or more. FASB Statement
No. 114 is not applicable to Bancorp's instalment loans, residential
loans, leases and debt securities. The adoption of FASB Statement No.
114 had no material impact on Bancorp's financial condition or results
of operations.
Stock Options
Pursuant to Bancorp's 1988 Stock Option Plan, options to purchase
43,000 shares of Bancorp common stock were granted during the first
three months of 1995. The options have exercise prices ranging from
$29.69 to $30.89.
Off-Balance Sheet Financial Agreements
In the normal course of business, Bancorp uses various financial
instruments with off-balance sheet risk to manage its interest rate
risk and to meet the financing needs of its customers. At March 31,
1995, these off-balance sheet instruments consisted of standby letters
of credit of $96 million, commitments to extend credit of $1.3 billion
and interest rate swaps with a notional amount of $1.5 billion.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Summary
Bancorp's net earnings for the first quarter of 1995 were $15.0
million compared to $13.7 million for the first quarter of 1994. Net
interest income increased by $3 million, or 7%, over the comparable
period in 1994. Interest income increased by $30.3 million, or 40%,
which more than offset the $27.4 million, or 84%, increase in interest
expense. Other income increased $1.4 million, or 14%, primarily due
to the increase in gain on sales of loans. Other expense increased
$3.6 million, or 12%, primarily due to increases in salaries and
benefits and equipment expense.
The following ratios compare returns on average assets and average
equity for the first three months of 1995 and for the year 1994.
Three Months Ended Year Ended
March 31, 1995 December 31, 1994
Net Earnings to Average Assets(1) 1.15% 1.24%
Net Earnings to Average Shareholders' Equity(1) 16.40% 16.64%
<FN>
(1)Net earnings for the three months ended March 31, 1995 have been annualized.
The ratio of operating expense to tax equivalent revenue ("efficiency
ratio") was 56.7% for the first three months of 1995 compared to 54.6%
for the first three months of 1994. Tax equivalent revenue includes
tax equivalent net interest income and other income but excludes non-
recurring gains and security gains or losses. The primary reason for
the increase in the efficiency ratio was operating expense increased
at a proportionately faster rate than did tax equivalent net interest
income.
Asset quality remained strong during the first quarter of 1995. The
ratio of nonperforming loans to total loans was .40% at March 31,
1995, compared to .17% at December 31, 1994 and .63% at March 31,
1994. The ratio of nonperforming assets to total loans and other real
estate owned was .45% at March 31, 1995, compared to .25% at December
31, 1994 and .83% at March 31, 1994.
Net Interest Income
See Table 1 for net interest income on a tax equivalent basis and
Table 2 for consolidated average balances, rates earned/paid and net
interest margin.
Net interest income on a tax equivalent basis increased approximately
$3.0 million for the first three months of 1995 over the comparable
period in 1994. This increase resulted from a $4.6 million increase
due to changes in volume more than offsetting the $1.6 million
decrease which was caused by changes in rates. Volume changes are
caused by changes in the average balances of interest earning assets
and interest bearing liabilities. The net interest margin was 3.80%
for the first three months of 1995 as compared to 4.24% for the
comparable period in 1994. The decrease in the net interest margin
during this period reflects the increase in the average rate paid on
interest bearing liabilities, which increased 189 basis points, more
than offsetting the increase of 131 basis points in the average rate
earned on interest earning assets. An increase in time deposits
combined with an increase in the rate paid on time deposits was the
primary reason for the increase in Provident Bancorp's overall cost of
interest bearing liabilities. An increase in the amount of commercial
and financial loans combined with repricing of commercial and
financial loans were the primary reasons for the increase in the
average rate earned on interest earning assets. Beginning in the first
quarter of 1994, interest rates began to increase and have continued
to increase through the first quarter of 1995. As interest rates have
increased, interest bearing liabilities have reacted more quickly than
interest earning assets, causing the net interest margin to decrease.
The increase in interest rates that began in 1994 was the primary
reason that interest rate swaps decreased the net interest margin by
25 basis points during the first quarter of 1995. During the first
quarter of 1994, interest rate swaps increased the net interest margin
by 38 basis points.
In preparing the net interest margin tables, nonaccrual loan balances
are included in the average balances for loans. Loan fees are
included in loan revenue as follows: first quarter 1995 - $4.6
million and first quarter 1994 - $3.5 million.
Provision for Possible Loan Losses
For the first quarter of 1995 and 1994, the provision for possible
loan losses was $2 million and $3 million, respectively. As loan
growth has slowed and net loan charge-offs have declined, the
provision for possible loan losses has decreased. Net loan charge-offs
have declined $1.1 million in the first quarter of 1995 when compared
to the first quarter of 1994, primarily due to the increase in
recoveries. Nonperforming assets were 33% lower at March 31, 1995 when
compared to March 31, 1994.
Other Income
Other income increased $1.4 million during the first quarter of 1995,
primarily due to the increase in gain on sale of loans. The sale of an
equipment lease was the primary reason for the increase in gain on
sale of loans. Other service charges and fees increased primarily due
to an increase in credit card fee income.
Other Expense
Other expense increased $3.6 million during the first quarter of 1995
when compared to 1994. Salaries increased as a result of merit and
promotion increases, increases in incentives and increased personnel
in the retail banking area. Occupancy expense increased primarily due
to an increase in the amount of space rented. The increase in
equipment expense was primarily due to increased depreciation expense
relating to the bank's data processing operations. The increase in
deposits was the reason for the increase in deposit insurance expense.
Increases in stationary and supplies expense and data processing
expense were the primary reasons for the increase in other.
Financial Condition
Investment Securities and Short-Term Investments
Although federal funds sold and reverse repurchase agreements
decreased $207.1 million, or 82%, during 1995, average balances have
increased $5 million for the first three months of 1995. The decrease
in the period-end balance reflects primarily the sale of such assets
in order to fund a reduction in short-term debt.
Loans
The sale of equipment financed under an equipment lease financing was
the primary reason for the decrease in equipment lease financing.
Consumer lease financing increased $25 million, or 13%, as automobile
leasing continued to grow. As competition has intensified, management
decided to limit instalment loan growth. As growth in the economy
begins to slow in 1995, Bancorp will more than likely experience
slower loan growth in 1995 than in 1994.
The following table shows the composition of the commercial and
financial loan category by industry type at March 31, 1995 (dollars in
millions):
Amount on
Type Amount % Nonaccrual
Construction $85.6 4 $.4
Manufacturing 397.0 20 3.3
Transportation/Utilities 122.0 6 5.7
Wholesale Trade 208.2 11 .8
Retail Trade 202.3 10 -
Finance & Insurance 109.7 6 .2
Real Estate Operators/Investment 249.2 13 .9
Service Industries 270.1 14 1.1
Automobile Dealers 96.1 5 -
Other(1) 202.9 11 .8
Total $1,943.1 100 $13.2
<FN>
(1)Includes various kinds of loans, such as small business loans and loans with
balances under $100,000.
The composition of the commercial mortgage and construction loan
categories by property type at March 31, 1995 is shown in the
following table (dollars in millions):
Amount on
Type Amount % Nonaccrual
Apartments $89.8 15 $.3
Office/Warehouse 130.3 21 .6
Residential Development 81.1 13 .1
Shopping/Retail 151.8 25 .9
Land 19.5 3 -
Industrial Plants 17.4 3 -
Hotel/Motel 25.2 4 -
Health Facilities 5.3 1 -
Auto Sales and Service 18.3 3 -
Churches 12.3 2 -
Mobile Home Parks 10.9 2 -
Other Commercial Properties 51.5 8 -
Total $613.4 100 $1.9
At March 31, 1995, approximately $137.2 million, or 3.2%, of Bancorp's
total loan portfolio was classified as highly leveraged loans. This
is an increase of $19.4 million since December 31, 1994. In general,
Bancorp does not originate highly leveraged loans but participates in
loans originated by larger banks. All of the highly leveraged loans
are current at this time except for one loan with a balance of $2
million that is on nonaccrual status. Placing this loan on nonaccrual
reduced interest income in the first quarter of 1995 by approximately
$121,000. These loans were considered by management in the
determination of the adequacy of the reserve for possible loan losses.
Bancorp also has commitments to lend up to an additional $52 million
at market rates under this type of transaction to present borrowers.
Bancorp maintains a reserve for possible loan losses to absorb
potential losses in its loan portfolio. Management's determination of
the adequacy of the reserve is based on reviews of specific loans,
loan loss experience, general economic conditions and other pertinent
factors. Loans deemed uncollectible are charged off and deducted from
the reserve and recoveries on loans previously charged off are added
to the reserve. Management considers the present reserve to be
appropriate and adequate to cover potential losses inherent in the
loan portfolio based on the current economic environment. However,
future economic changes cannot be predicted. Deterioration in general
economic conditions could result in an increase in the risk
characteristics of the loan portfolio and an increase in the provision
for possible loan losses.
The following table shows the progression of the reserve for possible
loan losses (dollars in thousands):
1995 1994
Balance at January 1 $51,979 $40,542
Provision for Possible Loan Losses 2,000 3,000
Loans Charged Off (1,945) (1,686)
Recoveries 1,953 539
Balance at March 31 $53,987 $42,395
The primary reason for the increase in recoveries in 1995 was the
partial recovery of a commercial loan charge-off that occurred in
1991. As a percentage of total loans outstanding, the reserve was
1.26% at March 31, 1995, 1.24% at December 31, 1994 and 1.21% at March
31, 1994.
Table 3 shows a comparison of the major components of nonperforming
assets over the past five quarters along with various asset quality
ratios. Nonperforming assets have increased $8.9 million during 1995.
Nonaccrual loans have increased approximately $10.1 million during the
first three months of 1995, primarily due to two commercial and
financial loans being put on nonaccrual status during the first
quarter. The decrease in other real estate owned was due primarily to
the sale of commercial properties. Nonperforming assets as a
percentage of loans and total assets at March 31, 1995 are at a level
that is more consistent with historical averages.
Deposits
Noninterest bearing deposits decreased $58.1 million, or 13%, during
the first three months of 1995 primarily due to a decrease in
commercial deposits.
Short-Term Debt
Short-term debt declined $125.9 million, or 24%, during the first
three months of 1995, primarily due to the $101.2 million decrease in
federal funds purchased and repurchase agreements. Commercial paper
decreased $24.7 million to a balance of $116.2 million at March 31,
1995.
Capital Resources and Adequacy
During the first three months of 1995, shareholders' equity increased
$13 million, or 3.6%, to $372.4 million. Dividends of $3.9 million on
common stock and $.6 million on preferred stock were paid in the first
three months of 1995. Treasury stock increased to $4.6 million at
March 31, 1995 as Bancorp purchased 184,827 shares and sold 42,105
shares of its common stock during the first quarter. In December,
1994, Bancorp announced that it would purchase up to 200,000 shares to
be used for various company benefit plans and for other corporate
purposes. Unrealized losses on marketable securities, net of deferred
income taxes, decreased $6.8 million during the first three months of
1995 as a result of an improvement in market conditions.
The following table of ratios is important to the analysis of the
adequacy of capital resources.
Three Months Ended Year Ended
March 31, 1995 December 31, 1994
Average Shareholders' Equity to Average Assets 7.01% 7.43%
Preferred Dividend Payout to Net Earnings 3.87(1) 5.15
Common Dividend Payout to Net Earnings 26.05(1) 25.47
Tier 1 Leverage Ratio 7.15 7.21
Tier 1 Capital to Risk-Weighted Assets 7.88 7.86
Total Risk-Based Capital To Risk-Weighted Assets 12.83 12.85
<FN>
(1)Net earnings and dividend payouts for the three months ended March 31, 1995 have been annualized.
In the fourth quarter of 1994, Bancorp proceeded with optional
redemption of its Series B preferred stock. Pursuant to the terms of
the Series B preferred stock, the Series B preferred shares were not
redeemed but ceased to accrue dividends at the preferred stock rate of
$8.00 per share. Dividends are now paid as if the Series B preferred
stock had been converted to Bancorp common stock.
Capital expenditures planned by Bancorp for building improvements and
furniture and equipment in 1995 are currently estimated to be
approximately $14 million. Included in this amount are projected
capital expenditures for improvements of the branch banking network
and improvements in data processing capabilities for The Provident
Bank's data processing subsidiary. Through March 31, 1995,
approximately $2.0 million of these expenditures have been made.
Management believes that currently available funds and funds provided
by normal operations will be sufficient to meet capital requirements.
Liquidity
Adequate liquidity is necessary to meet the borrowing needs and
deposit withdrawal requirements of customers as well as to satisfy
liabilities, fund operations and support asset growth. Cash flows
generated by new deposits, loan payments and maturities of loans are
sources of liquidity. Other sources include federal funds, investment
securities and access to borrowed funds in the money markets.
Net liquid assets at March 31, 1995 were as follows (dollars in
millions):
Cash and deposits due from banks $157.2
Federal funds sold net(1) (232.8)
Investment securities due with one year 593.1
Loans due within one year 1,520.0
Net liquid assets $2,037.5
<FN>
(1)Federal funds sold and reverse repurchase agreements less federal funds
purchased and repurchase agreements.
Total deposits increased $4.4 million from the amount reported at
December 31, 1994. Approximately $17 million of long-term debt was
repaid during the first three months of 1995; during the remainder of
1995, approximately $8.7 million of long-term debt is due to be repaid
based upon scheduled principal payments.
The major source of liquidity for Bancorp on a parent-only basis is
dividends paid to it by its subsidiaries. Pursuant to Federal Reserve
and state banking regulations, the maximum amount available for
dividend distribution to Bancorp at March 31, 1995 by its banking
subsidiaries was approximately $54 million. Bancorp has not received
dividends from its subsidiaries during the first three months of 1995.
At March 31, 1995, the parent had $116.2 million of short-term
commercial paper outstanding. A portion of commercial paper proceeds
was used to fund short-term loans. Contractual lines of credit
totaling $130 million have been obtained by Bancorp to support its
commercial paper borrowings. These lines had not been used at March
31, 1995. The parent had approximately $11.2 million in cash and
interest earning deposits and $84.4 million in short-term repurchase
agreements at March 31, 1995.
Management believes that the repayment of Bancorp's debt can be made
using funds generated by Bancorp and received as dividends from
subsidiaries both in the short-term as well as in the long-term.
Provident Bancorp, Inc. and Subsidiaries
Condensed Consolidated Statements Of Earnings
(unaudited)
(In Thousands)
Table 1.
Quarter Ended
March March
1995 1994
Total Interest Income $105,964 $75,626
Taxable Equivalent Adjustment 122 86
Taxable Equivalent Interest Income 106,086 75,712
Total Interest Expense 59,848 32,484
Net Interest Income 46,238 43,228
Provision for Possible Loan Losses 2,000 3,000
Taxable Equivalent Net Interest Income After
Provision for Possible Loan Losses 44,238 40,228
Noninterest Income 10,795 9,436
Noninterest Expense 32,342 28,762
Taxable Equivalent Earnings Before Income Taxes 22,691 20,902
Applicable Income Taxes 7,569 7,113
Taxable Equivalent Adjustment 122 86
Net Earnings $15,000 $13,703
Net Earnings Applicable to Common Stock $14,420 $12,960
Provident Bancorp, Inc. and Subsidiaries
Consolidated Average Balances, Rates and Yields
On a Fully Taxable Equivalent Basis
(unaudited)
(Dollars In Millions)
Table 2.
Quarter Ended
March 31, 1995 March 31, 1994
Rate Rate
Earned/ Earned/
Balance Paid Balance Paid
Assets:
Loans (Net of Unearned Income):
Commercial Lending:
Commercial and Financial $1,908 10.06% $1,516 7.58%
Commercial Mortgage 422 9.19 393 8.82
Commercial Construction 181 9.52 143 7.17
Equipment Lease Financing 103 7.65 95 8.14
Consumer Lending:
Residential 502 8.17 498 8.16
Instalment 926 8.49 789 7.78
Lease Financing 197 6.91 1 15.04
Total Loans 4,239 9.18 3,435 7.85
Reserve for Possible Loan Losses (55) (43)
Net Loans 4,184 9.30 3,392 7.95
Investment Securities:
Taxable 687 5.49 712 5.07
Tax Exempt 10 5.86 - 8.39
Total Investment Securities 697 5.50 712 5.07
Federal Funds Sold and Reverse
Repurchase Agreements 48 5.68 35 3.33
Total Earning Assets 4,929 8.73 4,139 7.42
Cash and Noninterest Bearing Deposits 145 140
Other Assets 144 108
Total Assets $5,218 $4,387
Liabilities and Shareholders' Equity:
Deposits:
Demand Deposits $262 2.22 $274 2.15
Savings Deposits 671 3.39 799 2.37
Time Deposits 2,691 6.09 1,689 4.38
Total Deposits 3,624 5.31 2,762 3.58
Short-Term Debt:
Federal Funds Purchased and
Repurchase Agreements 281 5.74 384 3.19
Commercial Paper 123 5.89 105 3.66
Short-Term Notes Payable 1 5.69 1 3.54
Total Short-Term Debt 405 5.79 490 3.29
Long-Term Debt 375 7.15 392 4.31
Total Interest Bearing Liabilities 4,404 5.51 3,644 3.62
Noninterest Bearing Deposits 368 335
Other Liabilities 80 68
Shareholders Equity 366 340
Total Liabilities and Shareholders' Equity $5,218 $4,387
Net Interest Spread 3.22% 3.80%
Net Interest Margin 3.80% 4.24%
Provident Bancorp, Inc. and Subsidiaries
Consolidated Quarterly Nonperforming Assets
(unaudited)
(Dollars In Thousands)
Table 3.
Quarter Ended
Mar. Dec. Sept. June March
1995 1994 1994 1994 1994
Nonaccrual Loans: (1)
Commercial Lending:
Commercial and Financial $13,173 $2,973 $2,431 $12,276 $14,682
Commercial Mortgage 1,868 1,869 2,233 2,569 3,372
Commercial Construction 78 78 201 521 518
Equipment Lease Financing - - - - -
Consumer Lending:
Instalment - - 31 1 335
Residential 1,327 1,396 1,182 1,443 2,182
Lease Financing - - - - -
Total Nonaccrual Loans 16,446 6,316 6,078 16,810 21,089
Renegotiated Loans (2) 896 961 978 988 997
Total Nonperforming Loans 17,342 7,277 7,056 17,798 22,086
Other Real Estate and Equipment Owned:
Commercial 84 714 2,117 1,786 1,755
Closed bank branches 189 311 274 279 449
Residential 271 350 455 947 1,857
Multifamily 740 1,094 1,101 1,185 673
Land 857 857 2,148 2,163 2,318
Total 2,141 3,326 6,095 6,360 7,052
Total Nonperforming Assets $19,483 $10,603 $13,151 $24,158 $29,138
Loans 90 Days Past Due Still Accruing (3) $4,858 $4,673 $4,420 $3,963 $3,078
Total Loans 4,285,665 4,204,538 3,960,845 3,700,374 3,508,805
Reserve for Possible Loan Losses 53,987 51,979 45,112 44,326 42,395
Total Assets 5,298,327 5,411,491 5,140,380 5,055,433 4,737,893
Reserve for Possible Loan Losses as a Percent of:
Nonperforming Loans 311.31% 714.29% 639.34% 249.05% 191.95%
Nonperforming Assets 277.10% 490.23% 343.03% 183.48% 145.50%
Total Loans 1.26% 1.24% 1.14% 1.20% 1.21%
Nonperforming Loans as a % of Total Loans .40% .17% .18% .48% .63%
Nonperforming Assets as a Percent of:
Total Loans and Other Real Estate .45% .25% .33% .65% .83%
Total Assets .37% .20% .26% .48% .61%
<FN>
(1) Bancorp generally stops accruing interest on loans when the payment of principal and/or
interest is past due 90 days or more.
(2) Loans renegotiated to provide a reduction or deferral of interest or principal because of a
deterioration in the financial position of the borrower.
(3) Loans in this category represent primarily consumer loans contractually past due 90 days or
more as to interest or principal payments.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit filed: Exhibit 27 - Financial Data Schedule
For submission in electronic filing only.
(b) Reports on Form 8-K
On March 28, 1995, Bancorp filed a report on Form 8-K for the purpose
of supplying additional exhibits to its Registration Statement No. 33-
61576 on Form S-8 for the Provident Bancorp, Inc. Deferred
Compensation Plan.
All other items required in Part II of this form have been omitted
since they are not applicable or not required.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Provident Bancorp, Inc.
Registrant
Date: May 10, 1995 \s\ John R. Farrenkopf
John R. Farrenkopf
Vice President and
Chief Financial Officer