BankProv no longer offers loans secured by cryptocurrency mining platforms
- BankProv, Headquartered in Amesbury, Massachusetts, Will No Longer Offer Loans Backed by Crypto Mining Machines, Bank it said in its fourth-quarter earnings report last week.
- The bank’s decision to end lending comes as the firm posted $47.9 million in net charges last year, most of which it said were loans secured by cryptocurrency mining facilities.
- The $1.6 billion firm said it reduced its cryptocurrency mining loan portfolio by nearly 50% to $41.2 million during the quarter ended Dec. 31, a decrease the bank it attributed to the sale of a portion of its non-performing loans and the repayment of an outstanding credit line. BankProv said the portfolio “will continue to decline as the bank is no longer originating this type of loan.”
Carol Houle, co-chairman and interim co-CEO of BankProv, said the firm is eager to take the lessons learned in 2022 and “emerge a better and stronger bank.”
“Despite 2022 losses, we enter 2023 well capitalized and well diversified. During the fourth quarter, we took decisive action to reduce our exposure to loans backed by cryptocurrency mining rigs,” said Houle, who is also the bank’s CFO. “The remaining sectors of our loan portfolio continue to perform in line with our historical experience, and it is largely due to our long-term portfolio diversification strategy that we have been able to weather recent volatility and losses.”
The bank’s digital asset mining loan book totaled $76.5 million at the end of September, several months before the bank revealed in a November SEC filing that it was preparing for a third quarter net loss of $27.5 million due to its exposure to space.
In the filing, BankProv said it made a partial write-down of the cryptocurrency mining rigs it repossessed in exchange for a $27.4 million loan forgiveness.
That devaluation, coupled with stressors facing the cryptocurrency mining industry, such as rising energy prices and falling value of Bitcoin, prompted the bank to undergo an overhaul of its secured loan portfolio from cryptocurrency mining platforms.
The bank’s efforts to distance itself from the troubled cryptocurrency mining sector come as it seeks new leadership.
CEO Dave Mansfield he resigned on Dec. 20, a move the bank’s board and former CEO called a “mutual decision.”
BankProv has named Houle and Joe Reilly as the bank’s president, co-CEO, and interim co-presidents.
A bank spokesman, who did not give a reason for Mansfield’s departure, said Mansfield and the bank’s board believed the time had come for new leadership.
“We will form a search committee and take the time to identify the best candidates and choose a leader who can continue BankProv’s tradition of serving the community and providing innovative banking solutions,” the spokesperson said. “We are confident that Carol and Joe will provide excellent leadership and an important sense of continuity in the interim.”