Provident Bancorp in Amesbury, Massachusetts, beset by a cryptocurrency hit that resulted in a steep third-quarter loss, stated it had righted the ship and returned to profitability late in 2022.
The $1.6 billion-asset mum or dad of BankProv stated in its earnings launch in late January that it swung from a net loss of $35.3 million for the third quarter to internet revenue of $2.7 million for the fourth quarter.
The restoration was notable as a result of the corporate had grappled with soured loans to a cryptocurrency miner. It cited a partial writedown on crypto mining rigs that had been repossessed in alternate for the forgiveness of a $27.4 million mortgage. Excluding that mortgage, Provident stated, its digital-asset mining mortgage portfolio totaled $76.5 million on the shut of the third quarter.
Provident is amongst a number of banks that expanded into the crypto enviornment solely to see it soften down in 2022. The firm stated in its fourth-quarter earnings report that its digital-asset portfolio dwindled by almost 50% from the prior quarter, to $41.2 million. It credited the sale of impaired loans.
“During the fourth quarter, we took decisive motion to cut back our publicity to loans secured by cryptocurrency mining rigs,” Carol Houle, interim co-president and co-CEO, stated in the earnings launch. “Not solely are we not originating all these loans, we now have additionally lowered that portfolio to just about half what it was” on the shut of the third quarter.
“The remaining sectors of our mortgage portfolio proceed to carry out in accordance with our historic expertise, and it’s in giant half resulting from our long-term technique of portfolio diversification that we now have been capable of climate latest volatility and losses,” Houle added.
The firm stated its fourth-quarter loans backed by crypto mining rigs, particularly, decreased by greater than 40% from the prior quarter, to $26.7 million. It expects the portfolio to proceed shrinking in 2023.
These kinds of loans made up the majority of Provident’s $46 million of internet charge-offs in the fourth quarter.
The mortgage losses weighed down full-year outcomes. Provident reported a $21.5 million loss for all of 2022. A yr earlier, it reported internet revenue of $16.1 million.
Provident had earlier made public its crypto woes and stated in November that it had reviewed its crypto portfolio and estimated “a majority” to be impaired. It positioned the impaired loans on nonaccrual standing.
In December, then-CEO Dave Mansfield resigned. He had led the financial institution since 2013.
Houle, who’s Provident’s chief monetary officer, stepped in as momentary co-CEO, sharing the position with the corporate’s former chairman, Joe Reilly. Provident stated it’s trying to find a everlasting chief government.