Provident in Mass. sets big goal for crypto-related income

Provident Bancorp in Amesbury, Mass., has set an ambitious goal for its dealings in crypto-related businesses.

The $1.6 billion-asset company disclosed in a recent presentation that it plans to bring in more than $1 million in fee income next year from cash vault services for Bitcoin ATMs, also known as BTMs.

Provident also shared in the presentation that it had about $95 million in crypto-related deposits on June 30, or nearly double what it had a quarter earlier. The company also had about $6 million of banking-as-a-service deposits at midyear.

A third of the crypto deposits are tied to exchanges, a quarter to institutional investors, and a fifth is related to BTMs, the presentation said.

Provident shared that, in the second quarter, it had only two active BTM customers, each with one vault location. The company said its projections include anticipated fees from five active customers with 37 vault locations awaiting activity.

Crypto-related deposits make up 7% of the company’s deposits, and 85% of the crypto-related deposits are noninterest bearing, Jeffrey Kitsis, an analyst at Piper Sandler, said in a note to clients.

"Based on the rapid growth that Signature Bank and Silvergate Capital have delivered in this space, we wouldn’t be surprised to see digital-asset deposits continue to move higher at a swift pace,” Kitsis added.