A great analyst I follow (Chris DeMuth) says that PVBC is basically down in sympathy with Silvergate Bank, which had massive crypto exposure.
According to DeMuth, who has PVBC on his buy list, even if you write off all of PVBC exposure, which is probably overly conservative, as their loans are on crypto mining rigs, not to exchanges or crypto traders, the book value of PVBC is still over $8.00
The kicker is that PVBC was a mutual to stock conversion, but it is past the three year anniversary, so could be a buyout target, based on its regional strength.
DeMuth did very well for me in 2022, and I like his analysis. I appreciate the kind words, 56chev, but I'm a free member here, so can't respond. Please feel free to post anything that contributes to the conversation.
Thanks for posting the bad news that came out in December.
Of course, that's why the stock dropped from around $15.00 to its current level. As I understand it, even if the entire 76 million needs to be written off-- which is unlikely, IMO-- the remaining business provides more than ample support for a price a higher than the current level. Moving on from the former CEO was a good move, of course.
Money is made when you can see that the market has over-reacted to a bad situation.
BankProv CEO resigns after $27.5 million crypto currency hit
Thu, January 5, 2023, 4:52 PM
Jan. 5—Provident Bancorp begins 2023 with new leadership after the December exit of CEO Dave Mansfield, following the bank's report that it expected a third quarter loss of $27.5 million related to loans to a cryptocurrency miner.
In a Nov. 15 filing to the Securities and Exchange Commission, Provident estimated it would report a net loss of approximately $27.5 million for the quarter ended Sept. 30, 2022, compared to net income of $5.1 million for the quarter ended Sept. 30, 2021.
"The Company is still evaluating the actual level of losses due to the recent decline in the cryptocurrency mining industry, and such losses may exceed this estimate," the company wrote.
"During the third quarter of 2022, the volatility in Bitcoin and rising energy costs called into question the financial stability of the Company's borrowers who hold digital asset mining loans, the collectability of all principal and interest related to these loans, as well as the value of the cryptocurrency mining rigs that serve as the underlying collateral."
The bank said its remaining digital asset mining loan portfolio as of Sept. 30 totaled $76.5 million, "of which, upon review, the Company estimates a majority to be impaired and placed on non-accrual status."
Created this board to follow & discuss Provident Bancorp (PVBC) which was just added as a buy by Chris DeMuth of SIfting the World. DeMuth made me a bunch of money in 2022 with his pick of RENN, a Chinese company with a litigation angle, that resulted in a $31.00 payout to shareholders in Dec 2022.
He just [ut this on his buy list yesterday. The company took a huge price hit last November when FTX went down, as it has been providing banking services to crypto players. DeMuth sees it as oversold, with some good basic business lines, and some kickers like potential buyout.
I've got a nice starter position. Welcome all comments, thoughts.