BankProv CEO resigns after $27.5 million crypto currency hit
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.
Joe Reilly, who has been serving as the board chair, and Carol Houle, the bank's chief financial officer, will serve as interim co-CEOs and co-presidents.
Laurie Knapp, who has been serving as the audit committee chair, will serve as board chair, the bank announced just before Christmas.
"BankProv remains well-capitalized and on sound financial footing," Reilly said in a statement. "Carol and I are confident in the Bank's future and are ready to provide continuity as we chart our course forward."
Reilly co-founded Centrix Bank in 1999 and served as CEO until 2014. The bank reached over $1 billion in assets and was acquired by Eastern Bank, after which the long-time New Hampshire banker became Eastern's regional president.
Reilly retired in December 2017 and joined the Provident's board in 2018.
Mansfield worked for the Amesbury, Mass.-based bank for more than two decades. BankProv operates in Massachusetts and New Hampshire. His resignation was a mutual decision with the bank, the news release said.
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."
Mike Cote is senior editor for news and business. Contact him at mcote@unionleader.com or 206-7724.
