AMESBURY, Mass. - Provident Bancorp, Inc. (NASDAQ:PVBC), the parent company of BankProv, has launched a new stock repurchase program, the firm announced today. The program authorizes the buyback of up to 883,366 shares, which represents about five percent of its current outstanding common stock. The company, currently valued at $196 million, has seen its stock rise nearly 16% year-to-date to $11.70. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
The initiation of the repurchase program follows the Federal Reserve Bank of Boston's non-objection. The repurchases are permitted in various forms, including open market or private transactions, block trades, and potentially under a trading plan in accordance with Rule 10b5-1 of the Securities and Exchange Commission. InvestingPro data shows the bank trades at a P/E ratio of 36.7, with analysts forecasting a decline in sales for the current year. Subscribers can access 6 additional ProTips and comprehensive financial metrics for deeper analysis.
Management will conduct repurchases based on its discretion, considering factors such as stock price, market conditions, other capital deployment opportunities, and the company's financial performance. The repurchase activities will adhere to the limitations of Rule 10b-18 of the Securities and Exchange Commission and other legal requirements.
The company has noted that the repurchase program may be adjusted, paused, or terminated at any time due to various reasons, including market conditions and investment opportunities. There is no obligation for Provident Bancorp to acquire any specific number of shares through this program.
Founded in 1828 and headquartered in Massachusetts, BankProv operates as a full-service commercial bank with retail branches in Northeastern Massachusetts and New Hampshire, along with commercial banking offices in Central New Hampshire. The bank prides itself on being the 10th oldest bank in the United States and ensures that 100% of deposits are insured through the FDIC and the DIF. With a beta of 0.46, the stock has shown lower volatility compared to the broader market, as revealed by InvestingPro metrics.
This announcement contains forward-looking statements which are based on current management expectations and may differ materially from actual results. Factors that could influence the company's results include economic conditions, interest rates, legislative changes, and other factors detailed in the company's SEC filings.
The information in this article is based on a press release statement from Provident Bancorp, Inc.
In other recent news, Provident Bancorp reported third-quarter financial results for 2024, revealing earnings per share (EPS) of $0.04, which fell short of the estimated $0.07. Stephens, a financial analyst firm, maintained an Equal Weight rating for the stock while increasing the price target to $12.00 from the previous $11.00. The bank's EPS shortfall was attributed to a higher-than-expected provision for credit losses, resulting in an increase in the non-performing assets to assets ratio.
Simultaneously, Provident Bancorp is facing scrutiny from the U.S. Securities and Exchange Commission (SEC) over potential violations of federal securities laws related to cryptocurrency loan disclosures. The company has expressed its intention to engage with the SEC staff through the Wells Notice process to address these concerns and seek a resolution. It is important to note that the potential costs, timing, and consequences of any enforcement action remain uncertain.
In other developments, Provident Bancorp's subsidiary, BankProv, has secured its top executives in new employment agreements. Joseph B. Reilly, the company's President and Chief Executive Officer, and Kenneth R. Fisher, the Executive Vice President and Chief Financial Officer, have finalized contracts that establish an initial three-year term for Mr. Reilly and a two-year term for Mr. Fisher. These agreements include provisions for potential salary increases, incentive and bonus programs, and standard senior management employee benefits.
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