Provident Bancorp, Inc. (PVBC): Business Model Canvas [Dec-2025 Updated]

You're digging into the final operational blueprint for Provident Bancorp, Inc. (PVBC) right as it finalized its merger with NB Bancorp, and honestly, it's a fascinating case study in strategic transition. This Business Model Canvas captures the engine that powered the bank to \$5.0 million in net income for the first half of 2025, all while they were actively de-risking by strategically cutting back on that high-risk Enterprise Value loan portfolio. See how they managed to push their Net Interest Margin up to 3.77% by Q2 2025, supported by \$1.6 billion in assets as of March 31, 2025, by focusing on core commercial lending and managing their community-focused value proposition-it's all mapped out below so you can see the precise levers they pulled.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Key Partnerships

You're looking at the key relationships that supported Provident Bancorp, Inc. right up to its final transaction in late 2025. These partnerships, especially the merger, fundamentally changed the structure of the business.

Definitive Merger Agreement with NB Bancorp, Inc. (Needham Bank)

The most significant partnership was the definitive merger agreement with NB Bancorp, Inc., the holding company for Needham Bank. This transaction closed shortly after midnight on November 15, 2025. The structure of the deal involved specific consideration for Provident Bancorp, Inc. shareholders.

The merger terms dictated the exchange ratio and cash option:

• Each share of Provident common stock converted into either 0.691 shares of Needham common stock or $13.00 in cash.
• Allocation procedures ensured that 50% of Provident shares received the Stock Consideration.
• The estimated value of the transaction was $211.8 million based on Needham's share price of $16.62 as of June 4, 2025.
• Provident Bancorp's market capitalization around the announcement was approximately $214 million.
• NB Bancorp estimated issuing approximately 5,944,350 shares of its common stock in the transaction.

The combination was expected to result in a larger entity, with pro forma total assets projected around $7.1 billion, total deposits near $5.9 billion, and total loans around $6.1 billion. A termination fee of $8.5 million was stipulated for the seller under certain conditions.

City of Amesbury for Main Office Sale/Leaseback Transaction

Prior to the merger, BankProv, a subsidiary of Provident Bancorp, Inc., entered into an agreement to sell its historic Main Office building in Amesbury, MA, to the City of Amesbury, with closing anticipated in early 2025. This was a strategic move to allow the city to relocate municipal operations while BankProv maintained a presence.

Key terms of the arrangement included:

• BankProv will continue to operate at the 5 Market Street location by leasing back a portion of the space.
• The leaseback is under a 10-year agreement.
• BankProv will utilize approximately 4,000 to 5,000 square feet for lobby and office space.

Federal Deposit Insurance Corporation (FDIC) and Depositors Insurance Fund (DIF)

As a regulated financial institution, BankProv's relationship with federal insurance bodies is a core element of depositor trust. BankProv operates as a Member FDIC and Member DIF.

The insurance structure provides comprehensive coverage for depositors:

BankProv's subsidiary was categorized as well capitalized under the FDIC regulatory framework as of March 31, 2025. For Provident Financial Holdings, Inc. (the holding company for Provident Savings Bank, F.S.B.), FDIC annual assessments for the fiscal year ended June 30, 2025, were reported as $573,000.

Financial and Legal Advisors for the Merger

The complex merger transaction required specialized external counsel and advisory services from both sides. You definitely want to know who was on the deal team.

The advisors involved in the June 5, 2025, merger agreement were:

• Provident Bancorp: Financial Advisor was Piper Sandler & Co.; Legal Counsel was Luse Gorman, PC.
• NB Bancorp: Financial Advisor was Keefe, Bruyette & Woods, Inc. (A Stifel Company); Legal Counsel was Nutter McClennen & Fish LLP.

Other agents included Alliance Advisors LLC as the Information agent to Provident Bancorp, which received a fee of $12,500, and Continental Stock Transfer & Trust Company as the exchange agent to NB Bancorp.

Correspondent Banks for Liquidity and Listing Service Deposits

Liquidity management involved reliance on various funding sources, including correspondent relationships and specific deposit channels that saw strategic changes leading up to the merger. BankProv utilized overnight borrowings to manage short-term liquidity needs at March 31, 2025.

Deposit sources related to correspondent or third-party services showed shifts:

• Deposits obtained through listing services decreased by $20.8 million, or 43.7%, from December 31, 2024, to March 31, 2025.
• For the quarter ending June 30, 2025, the decrease in listing service deposits compared to December 31, 2024, was $23.5 million, or 49.3%.

Total borrowings for BankProv stood at $127.5 million on March 31, 2025, which decreased significantly to $34.5 million by June 30, 2025. This reduction reflected improvement in managing current and anticipated liquidity needs.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Key Activities

You're looking at the core actions Provident Bancorp, Inc. was focused on right before the Needham Bank merger closed in mid-November 2025. The key activities centered on executing a strategic balance sheet shift while managing the final stages of a major corporate transaction.

Strategic Reduction of the High-Risk Enterprise Value (EV) Loan Portfolio

A primary activity involved actively managing down the concentration in the higher-risk Enterprise Value loan book, a clear strategic pivot toward a more traditional community bank profile. This effort showed tangible results through the third quarter of 2025. Management reported that EV loans were down $77.8M year-to-date as of September 30, 2025. This portfolio shift was also visible in the overall loan book, as net loans decreased by $42.5M, or 3.3%, from the previous quarter, driven by reductions in both mortgage warehouse loans and those EV loans. Still, the elevated non-accrual loans remained a focus, standing at $34.4M, predominantly concentrated within that EV segment.

Core Commercial and Mortgage Warehouse Loan Origination

While reducing legacy risk, Provident Bancorp, Inc. was simultaneously building out its core lending pipeline with disciplined underwriting. The loan team generated significant forward business, with the total loan pipeline growing appreciably to nearly $2.9 billion as of the end of Q3 2025. This pipeline carried a weighted average interest rate of approximately 6.15% at that time. Furthermore, the pull-through adjusted pipeline, representing loans closer to closing, stood at approximately $1.7 billion. This activity supported targeted growth in the commercial real estate (CRE) portfolio, which grew by $38.0M year-to-date through Q3 2025.

Managing Interest Rate Spread and Net Interest Margin (NIM)

Managing profitability through interest rate dynamics was a constant activity, especially as deposit costs rose. The Net Interest Margin (NIM) for the second quarter of 2025 was 3.77%. By the third quarter of 2025, the NIM had compressed by 10 basis points quarter-over-quarter to 3.67%. Correspondingly, the interest rate spread fell 16 basis points QoQ to 2.63% as deposit costs increased. Net interest and dividend income for Q3 2025 was reported at $13.2M. The activity here involved managing deposit pricing to balance funding sources, evident in the $25.6M QoQ decline in deposits, which included reductions in higher-cost brokered and listing service balances.

Regulatory Compliance and Capital Management

Maintaining a strong capital footing was a non-negotiable activity, particularly given the pending merger. As of June 30, 2025, the Bank was categorized as well capitalized under the Federal Deposit Insurance Corporation regulatory framework for prompt corrective action. Shareholders' equity to total assets stood at 15.4% at that same date. The focus on capital strength continued into the third quarter, with the tangible common equity ratio increasing 19 basis points to 8.22% as of September 30, 2025. This was achieved despite a slight dip in net income to $2.7M in Q3 2025 from $2.8M in Q2 2025.

Key capital and asset quality metrics as of late Q3 2025:

• Shareholders\' Equity to Total Assets (Q2 2025): 15.4%
• Tangible Common Equity Ratio (Q3 2025): 8.22%
• Non-accrual Loans (Q3 2025): $34.4M
• Allowance for Credit Losses/Loans (Q3 2025): 0.97%

Planning and Execution of the Merger Integration with Needham Bank

The final, critical activity in late 2025 was the successful closing and initial integration planning for the merger with NB Bancorp, Inc. All required regulatory approvals were secured by October 20, 2025, with the proposed merger expected to be completed on or about November 14, 2025. Provident stockholders approved the deal on September 16, 2025. The transaction involved Provident stockholders receiving either 0.691 shares of Needham common stock or $13.00 in cash per share, with a 50/50 allocation target. Post-close, BankProv was scheduled to merge with and into Needham Bank over the weekend beginning November 15, 2025. Joseph B. Reilly, Provident's CEO, was appointed as a director of Needham and Needham Bank, effective at the closing.

The merger transaction details included:

The combined organization was projected to operate 18 branches across Massachusetts and Southern New Hampshire, with total expected assets near $7.1 billion at transaction close.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Key Resources

You're looking at the core assets that back Provident Bancorp, Inc. (PVBC) as it navigates a major strategic shift with the pending merger. These aren't just line items; they are the foundation of its operating capacity right now.

The tangible financial strength is clear from the balance sheet. As of March 31, 2025, the company reported Shareholders' equity of $234.0 million. This capital base is critical for absorbing potential losses and supporting lending activities. Furthermore, the overall scale is represented by Total assets of approximately $1.6 billion at March 31, 2025. This size gives it a certain market presence, though the strategic shift is aimed at becoming more of a traditional community bank. The latest reported Shareholders' Equity, as of the end of the third quarter, actually ticked up to $241.0 million on September 30, 2025, showing capital retention despite a slight sequential dip in net income to $2.7 million for that quarter.

A significant intangible asset is the BankProv brand and its nearly 200-year history in the community. Founded in Amesbury, Massachusetts, in 1828, BankProv is recognized as the 10th oldest bank in the nation. This longevity translates into deep community trust, which is invaluable for deposit gathering and relationship banking, especially as the bank executes its strategy to shift away from riskier specialty lending like enterprise value loans.

Regulatory standing is a non-negotiable resource for any bank. As of March 31, 2025, and confirmed again as of June 30, 2025, the Bank was categorized as well capitalized under the FDIC regulatory framework for prompt corrective action. This status means it exceeds minimum capital requirements, providing a buffer against economic stress. The bank also insures 100% of deposits through a combination of FDIC insurance and the Depositors Insurance Fund (DIF).

The human capital, specifically the experienced executive team and board of directors (pre-merger structure), is another key resource. This team, led by CEO Joseph Reilly, was actively managing the balance sheet shift and overseeing the final regulatory approvals for the proposed merger with Needham Bank, anticipated to close in the fourth quarter of 2025. Their experience is being tested in managing the transition from a specialty lender to a more traditional commercial bank profile.

Here's a quick look at some key financial metrics around the reporting dates:

To be fair, the asset base is in flux as the bank executes its strategy. You can see the focus on balance sheet management in the following operational highlights from the recent past:

• Enterprise value loans down $77.8 million Year-to-Date (YTD) as of Q3 2025.
• Commercial Real Estate (CRE) loans grew $38.0 million YTD as of Q3 2025.
• Total borrowings sharply reduced by 78.4% from March 31, 2025, to June 30, 2025.
• Deposit costs rose sequentially to 3.28% in Q3 2025.

Finance: draft 13-week cash view by Friday.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Value Propositions

You're looking at the core value Provident Bancorp, Inc., through its bank, BankProv, delivers to its clients and the market as of late 2025. It's built on a foundation of being a full-service commercial bank with a community focus, a lineage stretching back to its founding in 1828 in Amesbury, Massachusetts. This isn't just a tagline; it means offering a combination of traditional banking services and what they call innovative financial solutions across the Seacoast Region of Northeastern Massachusetts and New Hampshire.

A key differentiator for depositors is the assurance of deposit insurance exceeding federal limits via the Depositors Insurance Fund (DIF). BankProv combines standard FDIC coverage with the DIF, which is a private, industry-sponsored fund that insures all deposits above the federal limits, meaning every dollar is fully protected without a coverage cap. For context, as of June 30, 2023, approximately 47% of total deposits were covered by the DIF. This protection comes at no additional cost to the depositor.

The financial performance underpinning these value propositions shows a clear focus on margin improvement and funding optimization through the first half of 2025. Here are some of the key numbers you should be tracking:

Provident Bancorp, Inc. is actively pursuing targeted growth in commercial real estate and mortgage warehouse lending, balancing this against strategic runoff in other areas. You can see the success in the loan portfolio growth figures reported since the end of 2024:

• Commercial Real Estate portfolio growth: $21.4 million, or 3.8%, since December 31, 2024.
• Construction and Land Development portfolio growth: $9.3 million, or 33.0%, since December 31, 2024.
• Mortgage Warehouse portfolio growth: $25.0 million, or 9.6%, since December 31, 2024.

To give you a sense of concentration, as of December 31, 2024, Commercial Real Estate Loans made up 42.16% of the total loan portfolio. The mortgage warehouse team specifically commits to superior service for loan origination businesses, offering features like up to a 100% advance rate and up to a 90-day warehouse period.

The bank has demonstrated proactive liquidity management and reduction of high-cost brokered deposits. This pivot in funding mix is working, as evidenced by the significant deleveraging of wholesale funding sources. Total borrowings fell by $93.0 million, or 73.0%, between March 31, 2025, and June 30, 2025, settling at $34.5 million on the latter date. This reduction in borrowings, coupled with lower deposit costs, helped drive the NIM expansion. The total cost of interest-bearing liabilities improved, declining by 74 basis points YoY to reach 3.15% in Q2 2025. Deposits overall grew $73.5 million QoQ to $1.26 billion as of June 30, 2025.

Finally, the result of this focus on margin and funding discipline is clear in the Improved Net Interest Margin (NIM) to 3.77% in Q2 2025. This represents an expansion from 3.65% in the first quarter of 2025. The interest rate spread also widened to 2.79% in Q2 2025. This momentum helped push net income to $2.8 million for that quarter, reversing a loss from the prior year's second quarter. Finance: draft the pro-forma NIM impact from the Needham merger closing by next Tuesday.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Customer Relationships

Relationship-driven, localized service model in New England is the core approach for Provident Bancorp, Inc., the holding company for BankProv. BankProv conducts business through its retail branches in the Seacoast Region of Northeastern Massachusetts and New Hampshire, alongside commercial banking offices in the Manchester/Concord market in Central New Hampshire. As of the first quarter of 2025, BankProv operated with seven branch locations on the North Shore of Massachusetts and in southern New Hampshire. The strategic focus remains on acquiring, retaining, and expanding customer relationships through this network, mobile banking, and online banking.

Dedicated client experience team for personalized support underpins the relationship strategy. The bank emphasizes a commitment to credit quality and expanding market share by focusing on commercial lending relationships. This focus is evident in the loan portfolio composition, where commercial loan types-commercial mortgage, multi-family, construction, and commercial loans-accounted for 85.9% of the loan portfolio as of December 31, 2024. Targeted growth in commercial real estate loans was noted, with CRE growing by $38.0 million Year-to-Date (YTD) as of Q3 2025, while enterprise value loans were down $77.8 million YTD, reflecting a strategic shift to a more traditional community bank balance sheet. In Q1 2025, commercial loan growth was $36.7 million, or 4.9% from the end of 2024.

Direct engagement through retail branches and commercial offices facilitates this localized service. The Q3 2025 results show a net income of $2.7 million, with Net Interest and Dividend Income at $13.2 million. The bank is preparing for a significant change, as the merger with NB Bancorp, Inc. was confirmed to close shortly after midnight on November 15, 2025. The combined organization is expected to operate 18 branches across Metrowest, Greater Boston, the North Shore in Massachusetts, and Southern New Hampshire.

High-touch service is directed toward commercial real estate and specialty lending clients. The bank has been executing a strategic balance sheet shift away from enterprise value loans, which remained elevated on non-accrual status at $34.4 million as of June 30, 2025. The allowance for credit losses for loans was $21.2 million, or 1.59% of total loans, as of March 31, 2025. Shareholders' equity stood at $241.0 million as of Q3 2025.

Transactional service for listing and brokered deposit channels is actively being reduced as part of the funding source management. Total deposits declined by 2% Quarter-over-Quarter (QoQ), or $25.6 million, in Q3 2025, with explicit mention of brokered and listing service deposits being reduced. This reduction trend was visible earlier in the year:

The pro forma total deposits for the combined entity post-merger are expected to be $5.9 billion. The cost of interest-bearing liabilities in Q3 2025 rose to 3.29%.

• The BankProv mission is to be a Trusted Advisor and Partner for clients.
• Fully insured deposits are provided at no additional cost through FDIC coverage and the Depositors Insurance Fund (DIF).
• Shareholders' equity to total assets was 15.1% at March 31, 2025.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Channels

You're looking at how Provident Bancorp, Inc., through its operating subsidiary BankProv, gets its value proposition to the market as of late 2025. It's a mix of established physical presence and necessary digital tools, all supporting a balance sheet that stood at $1.6 billion in total assets as of March 31, 2025.

The physical footprint is concentrated in specific, high-value geographic areas, supporting both retail and commercial banking needs. Honestly, for a bank of this size, the physical channel count is quite specific, which helps you map their local market focus.

The digital channels are the backbone for efficiency, supporting both commercial and retail customers. While I don't have the exact 2025 metrics on digital adoption rates or active user counts, the bank emphasizes its commitment to 'technology-driven banking solutions'. This is crucial as they navigate the market, especially considering the net loans stood at $1.29 billion at the end of Q2 2025.

For more specialized, high-value lending, Provident Bancorp, Inc. relies on a direct sales force. This team targets specific asset classes, which is where a lot of the bank's lending activity is focused. Here's what we know about their lending focus, which directly ties to this sales channel:

• Commercial real estate loans
• Commercial loans
• Mortgage warehouse loans

This direct sales approach is key for managing the loan portfolio, which saw a net decrease of $42.5 million, or 3.3%, from the previous quarter, primarily in mortgage warehouse and enterprise value loans as of September 30, 2025. The bank reported net income of $2.7 million for that same third quarter.

The physical locations are also undergoing strategic changes; for instance, the Main Office building was part of a sale/leaseback transaction during Q2 2025, which resulted in a $745,000 gain. That kind of transaction definitely impacts how the physical channel operates going forward.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Customer Segments

You're looking at the segments Provident Bancorp, Inc., through BankProv, is serving as of late 2025, focusing on where the dollars and strategic shifts are happening.

The core geographic footprint for retail customers centers on the Seacoast Region of Northeastern Massachusetts and New Hampshire, with commercial banking offices also in the Manchester/Concord market in Central New Hampshire.

The composition of deposits as of March 31, 2025, showed a total of $1.18 billion, reflecting intentional scaling back in certain areas. By September 30, 2025, total deposits had decreased by 2.0% ($25.6 million) from the prior quarter.

The strategic reduction in certain funding sources is clearly visible in the deposit data from early 2025:

• Deposits related to the enterprise value portfolio decreased by $13.1 million, or 8.7%, from December 31, 2024, to March 31, 2025.
• Brokered deposits fell by $25.2 million, or 16.8%, over the same period.
• Deposits obtained through listing services saw a reduction of $20.8 million, or 43.7%, by March 31, 2025.
• Specialty deposits decreased by $34.5 million, or 27.8%, as of March 31, 2025.

The loan portfolio emphasizes commercial real estate, commercial, and mortgage warehouse loans as primary lending products. The strategic shift in loan mix is evident in the loan reduction figures leading into Q3 2025:

The segment of enterprise value clients is being strategically reduced, as shown by the loan activity. A specific relationship was placed on non-accrual status for $10.4 million in Q1 2025, followed by a workout transaction on a $10.5 million relationship in Q2 2025. The overall net loan portfolio saw a decrease of $42.5 million (3.3%) from the second quarter to the third quarter of 2025, driven partly by reductions in enterprise value loans.

For mortgage warehouse lenders and related financial businesses, the portfolio saw increases in Q1 2025, but the segment was noted as having reductions contributing to the overall net loan decrease by Q3 2025.

The segment of institutional/brokered deposit customers is also being reduced, with brokered deposits falling by $25.2 million (16.8%) from year-end 2024 to March 31, 2025. Furthermore, borrowings, which serve as a related funding source, were proactively reduced by $27.0 million (78.4%) between the second and third quarters of 2025.

The balance sheet as of September 30, 2025, showed shareholders' equity at $241.0 million.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Cost Structure

The Cost Structure for Provident Bancorp, Inc. (PVBC) as of late 2025 is heavily influenced by funding costs and personnel, with significant near-term impact from the November 2025 merger with NB Bancorp, Inc.

Interest Expense on Funding Sources

The cost of interest-bearing liabilities for the quarter ended September 30, 2025, was a primary driver of expenses, totaling $8.1 million. This figure reflects the cost of deposits and borrowings, with the latter being a relatively small component of the total interest expense for the period.

Noninterest Expense Components

Total Noninterest Expense for the third quarter of 2025 was $11.4 million. This figure was lower than the previous quarter, partly due to the run-off of merger-related costs ahead of the November 2025 closing.

• Salaries and employee benefits represented the largest known component of this category, totaling $7.749 million for the quarter ended September 30, 2025 (in thousands: $7,749).
• A non-recurring item impacting the quarter was the reversal of a previously recognized loss contingency totaling $350,000.

The remaining portion of the $11.4 million Noninterest Expense covers the operational and compliance overhead necessary for a publicly traded bank.

Merger-Related Costs in Late 2025 Context

The definitive merger agreement with NB Bancorp, Inc. was set to close shortly after midnight on November 15, 2025. This event marks a significant, though likely non-recurring, cost factor for the full year 2025, as evidenced by the Q3 report noting a decrease in noninterest expense due to a reduction in merger-related expenses.

For the period leading up to the close, the cost structure included items related to the transaction, such as the $350,000 contingency reversal in Q3 2025. Post-merger, the operating costs will transition into the combined entity's structure, with NB Bancorp projecting quarterly core operating expenses of approximately $113 million for the final quarter of 2025.

Provident Bancorp, Inc. (PVBC) - Canvas Business Model: Revenue Streams

You're looking at the core ways Provident Bancorp, Inc. (PVBC) brings in money, which is heavily weighted toward traditional banking activities, though the mix is shifting. Here's the quick math on the latest figures we have for Q3 2025, plus that key yield from Q2 2025.

The primary engine remains the spread between what the bank earns on its assets and what it pays out on its liabilities. For the third quarter of 2025, Provident Bancorp, Inc. reported $13.2 million in net interest and dividend income.

To give you a sense of the asset side of that equation for Q3 2025, the Total interest and dividend income reached $21.3 million, while the Total interest expense was $8.1 million.

The quality of the earning assets is key here. Looking back at the second quarter of 2025, the yield on the loan portfolio sat at 6.09%. This is a crucial metric for understanding the return on their primary asset class.

Noninterest income is the secondary stream, which includes various fees for services rendered. For Q3 2025, Provident Bancorp, Inc. reported $1.6 million in noninterest income, which covers things like card interchange and wire transfers. Still, you should note that this figure represented a decline of $0.7 million quarter-over-quarter, partly due to a gain in Q2 2025.

We can look at the components that make up the noninterest income, though specific Q3 2025 figures for every sub-component aren't always broken out in the top-line summary. For instance, in Q1 2025, the line item 'Interest and fees on loans' showed a decrease of $2.2 million compared to the prior quarter, which gives you a sense of the transactional fee volatility.

The income derived specifically from the investment securities portfolio is embedded within the total interest and dividend income. Based on the Q3 2025 figures, the total interest and dividend income was $21.3 million, and the net interest and dividend income was $13.2 million. The difference between these two figures represents the gross interest earned on securities and other earning assets, less the interest expense allocated to those assets, but a direct, standalone number for investment securities portfolio income isn't explicitly stated for Q3 2025 in the primary reports.

Here is a summary of the key revenue-related figures we have for the third quarter of 2025, along with the most relevant yield data:

The bank is clearly focused on managing its balance sheet composition, evidenced by commentary around shifting from enterprise value loans to commercial real estate (CRE) growth year-to-date in Q3 2025.

You can also see the components of the interest-bearing liabilities, which directly impact the net interest income stream. For Q3 2025, the cost of interest-bearing liabilities rose 14 basis points quarter-over-quarter to 3.29%, and deposit costs increased 17 basis points to 3.28%.

The revenue streams are supported by the bank's overall asset performance, which saw the average yield on earning assets increase 8 basis points to 5.76% in Q3 2025 compared to the trailing quarter.

Finance: draft 13-week cash view by Friday.