AMESBURY, Mass., July 14, 2016 /PRNewswire/ -- Provident Bancorp, Inc. (the "Company") (NasdaqCM: PVBC), the holding company for The Provident Bank (the "Bank"), reported net income attributable to common shareholders for the three months ended June 30, 2016 of $1.4 million, or $.15 per share, compared to $1.2 million for the three months ended June 30, 2015. Net income attributable to common shareholders for the six months ended June 30, 2016 was $2.9 million, or $.31 per share, compared to $2.2 million for the six months ended June 30, 2015. Provident Bancorp, Inc. was not a publicly traded company for the first six months of 2015 and, as a result, earnings per share are not applicable for that period.
David P. Mansfield, Chief Executive Officer, said, "Our strategic objective is to positively impact the vitality of the communities we serve by creating customized banking solutions for small-to-medium size business customers. With this focus, we continue to review and invest in our employees and infrastructure to deliver a high level of service to our customers."
Net interest income before provision for loan losses increased by $643,000, or 11.3%, compared to the second quarter of 2015 and increased by $1.4 million, or 12.5%, compared to the six months ending June 30, 2015. The growth in net interest income this quarter over the prior year's second quarter is primarily the result of an increase in our average interest earning assets of $67.6 million or 10.7% and an increase in net interest margin of 2 basis points to 3.62% for the three months ended June 30, 2016. The growth in net interest income for the six months ended June 30, 2016 compared to the six months ended in the same period 2015 is primarily the result of an increase in average interest earning assets of $70.9 million or 11.2% and an increase of the net interest margin of 4 basis points to 3.60% for the six months ended June 30, 2016.
Provision for loan losses of $210,000 were booked for the second quarter of 2016 compared to $193,000 for the same period 2015. For the six months ended June 30, 2016$321,000 of provisions were recognized compared to $471,000 for the six months ended June 30, 2015. The provisions in the allowance for loan losses resulted in primarily an increase in our loan portfolio as we apply historical loss ratios to newly originated loans, which, absent other factors, results in an increase in the allowance for loan losses as the loan portfolio increases. The allowance for loan losses as a percentage of total loans was 1.40% as of June 30, 2016 compared to 1.49% as of June 30, 2015. The allowance for loan losses as a percent of non-performing loans was 601.24% as of June 30, 2016 compared to 231.33% as of June 30, 2015. Non-performing assets were $1.4 million or .18% to total assets as of June 30, 2016 compared to $3.3 million or .46% to total asset for the same period 2015.
Non-interest income increased $108,000, or 12.6% to $967,000 for the three months ended June 30, 2016. For the six months ended June 30, 2016, non-interest income increased $219,000, or 13.0%, to $1.9 million. The primary reason for the increases in both periods presented is due to the increased income with our bank owned life insurance policies (BOLI). Additional purchases of BOLI were made during the second half of 2015.
Non-interest expense increased $401,000, or 8.6% to $5.1 million for the three months ended June 30, 2016. For the six months ended June 30, 2016, non-interest expense increased $659,000 or 7.1% to $10.0 million. The primary reasons for the increases are salary expense and professional fees. Increases in salary and employee benefits were $363,000 or 13.0% for the three months ended June 30, 2016 and $616,000 or 10.9% for the six months ended June 30, 2016. Increases in professional fees were $85,000 or 37.3% for the three months ended June 30, 2016 and $133,000 or 29.9% for the six months ended June 30, 2016.
As of June 30, 2016 total assets have increased $17.0 million, or 2.29% to $760.4 million compared to $743.4 million at December 31, 2015. The primary reason for the increase is due to net loans with an increase of $24.9 million or 4.5%. The increase in loans is offset by a decrease in cash and cash equivalents of $3.5 million or 17.3% to $16.9 million. On May 31, 2016 the Company transferred all of its held-to-maturity securities to available-for-sale. The cost basis transferred was $44.2 million with an unrealized net gain of $2.2 million. The reason for the transfer was for liquidity management. Deposits were $607.3 million as of June 30, 2016 representing an increase of $30.1 million or 5.2% compared to December 31, 2015. Borrowings decreased $18.5 million or 32.2% to $38.9 million as of June 30, 2016.
As of June 30, 2016, shareholders' equity was $106.9 million compared to $101.4 million at December 31, 2015 representing an increase of $5.5 million, or 5.5%. The increases are primarily due to year-to-date net income of $2.9 million and an increase in other comprehensive income of $2.5 million, which includes the $1.3 million net unrealized gain from transferring the securities.
About Provident Bancorp, Inc. Provident Bancorp, Inc. is a Massachusetts corporation that was formed in 2011 by The Provident Bank to be its holding company. Approximately 53.0% of Provident Bancorp, Inc. outstanding shares are owned by Provident Bancorp, a Massachusetts corporation and a mutual holding company. Established in 1828, The Provident Bank, the 10th oldest bank in the country, is a full-service community bank with a focus in commercial lending and business services with offices in Amesbury and Newburyport, Massachusetts and Bedford, Exeter, Hampton, Portsmouth and Seabrook New Hampshire. All deposits are insured in full through a combination of insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF). For more information about The Provident Bank please visit our website www.theprovidentbank.com or call 877-487-2977.
Forward-looking statements This news release may contain certain forward-looking statements, such as statements of the Company's or the Bank's plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified by the use of words such as, "expects," "subject," "believe," "will," "intends," "will be" or "would." These statements are subject to change based on various important factors (some of which are beyond the Company's or the Bank's control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management's analysis of factors only as of the date of which they are given). These factors include general economic conditions, trends in interest rates, the ability of our borrower to repay their loans, the ability of the Company or the Bank to effectively manage its growth and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive. Readers should carefully review the risk factors described in other documents of the Company files from time to time with the Securities and Exchange Commission, including Current Reports on Form 8-K.
Provident Bancorp, Inc.
Consolidated Balance Sheet
Cash and due from banks
Interest-bearing demand deposits with other banks
Money market mutual funds
Cash and cash equivalents
Investments in available-for-sale securities (at fair value)
Investments in held-to-maturity securities (fair values of $46,474