LOWELL, Mass., July 25, 2023 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced its financial results for the three and six months ended June 30, 2023.
Executive Chairman & Founder George Duncan commented, "We are pleased with our second quarter results. Our operating strategy has always been to serve our customers and communities through consistent and disciplined lending, a conservative and long-term focus, being highly responsive to our customers' banking needs and making ongoing investments in our products, services, and people to provide the best banking services through all economic cycles. We have always sought to fund asset growth with relationship-based customer deposits and use wholesale borrowings as supplemental funding for relatively short periods of time. This approach has served us well over time and especially now. We have a relatively high level of liquidity with significant funding capacity and are well positioned to take advantage of market opportunities in the current environment."
Key financial results at or for the three months ended June 30, 2023, are as follows:
- Net income amounted to $9.7 million, or $0.79 per diluted common share, compared to $8.2 million, or $0.67 per diluted common share, for the three months ended June 30, 2022 and $10.8 million, or $0.88 per diluted common share, for the three months ended March 31, 2023.
- Included in pre-tax income were $3.4 million in Employee Retention Credits ("ERC"), which the Company recognized as a reduction to salary and benefits expense, a loss on the sale of debt securities of $2.4 million and a provision for credit losses of $2.3 million.
- Total loans amounted to $3.35 billion, an increase of $115.5 million, or 4%, compared to March 31, 2023. Loans outstanding have increased 9% compared to June 30, 2022.
- Total customer deposits amounted to $4.08 billion, an increase of $59.4 million, or 1%, compared to March 31, 2023. Customer deposits have increased 1% compared to June 30, 2022.
- Cash and equivalents amounted to $258.8 million, while wholesale borrowings amounted to $3.3 million at June 30, 2023.
Chief Executive Officer Jack Clancy commented, "Loan growth was strong during the quarter, and we continue to see good demand in our markets." Mr. Clancy continued, "In June, to increase asset sensitivity and earnings, the Company sold $84.8 million in investment securities, reinvesting the proceeds into higher yielding short-term investments, and separately entered into a two-year, pay fixed loan hedge with a notional balance of $50.0 million. These initiatives provide an annualized income enhancement of approximately $2.0 million to net interest income based on interest rates at June 30, 2023."
Net Income
Net income for the three months ended June 30, 2023, amounted to $9.7 million, an increase of $1.5 million, or 19%, compared to the three months ended June 30, 2022.
- The increase in net income during the period was due primarily to an increase in net interest income of $2.3 million and a decrease in non-interest expense of $1.2 million, partially offset by a decrease in non-interest income of $1.3 million. The components of the increase in net income are detailed below.
Net Interest Income
Net interest income for the three months ended June 30, 2023, amounted to $38.1 million, an increase of $2.3 million, or 6%, compared to the three months ended June 30, 2022.
- The increase in net interest income during the period was due largely to increases in loan interest income of $9.7 million and other interest-earning asset income of $1.5 million, partially offset by an increase in deposit interest expense of $9.0 million, due primarily to higher market interest rates over the comparable periods and increased competition for deposits from bank and non-bank alternatives.
Net Interest Margin
Three months ended – June 30, 2023 compared to March 31, 2023
Tax-equivalent net interest margin ("net interest margin") (non-GAAP) was 3.55% for the three months ended June 30, 2023, compared to 3.76% for the three months ended March 31, 2023.
Net interest margin compared to the prior quarter was impacted by the following factors:
- Average interest-earning deposits with banks decreased $42.9 million, or 22%, while the yield increased 37 basis points. The decrease in average balance resulted from funding loan growth, partially offset by a decrease in average debt securities, while the increase in yield reflected the increase in market interest rates during the period.
- Average debt securities decreased $20.3 million, or 2%, while the tax-equivalent yield remained unchanged. The decrease in average balance resulted from principal pay-downs, calls, maturities and sales of debt securities during the three months ended June 30, 2023.
- Average loan balances increased $67.7 million, or 2%, and the tax-equivalent yield increased 12 basis points. The increase in loan yields resulted primarily from increases in market interest rates during the period.
- Average total deposits increased $3.9 million and the yield increased 36 basis points. The increase in yield resulted from increases in market interest rates and competition from bank and non-bank alternatives during the period.
Three months ended – June 30, 2023 compared to June 30, 2022
Net interest margin was 3.55% for the three months ended June 30, 2023, compared to 3.45% for the three months ended June 30, 2022.
Net interest margin compared to the prior year quarter was impacted by the following factors:
- Average interest-earning deposits with banks decreased $58.3 million, or 28%, while the yield increased 413 basis points. The decrease in average balance resulted primarily from funding loan growth, partially offset by a decrease in average debt securities and an increase in average total deposits. The increase in yield reflected a significant increase in market interest rates during the period.
- Average debt securities decreased $54.3 million, or 6%, while the tax-equivalent yield increased 20 basis points. The decrease in average balance resulted from principal pay-downs, calls, maturities and sales of debt securities during the three months ended June 30, 2023, with funds redeployed into higher yielding interest-earning deposits.
- Average loan balances increased $248.5 million, or 8%, and the tax-equivalent yield increased 86 basis points. The increase in loan yields resulted primarily from increases in market interest rates during the period.
- Average total deposits increased $94.6 million, or 2%, and the yield increased 90 basis points. The increase in yield resulted from increases in market interest rates, a shift in deposit mix to higher yielding products and competition from bank and non-bank alternatives, occurring principally over the last nine months.
Provision for Credit Losses
The provision for credit losses for the three months ended June 30, 2023, amounted to $2.3 million, compared to $2.4 million for the three months ended June 30, 2022. The provision expense for the second quarter of 2023 resulted mainly from an increase in loans outstanding and, to a lesser extent, an increase in off-balance sheet commitments during the period.
Non-Interest Income
Non-interest income for the three months ended June 30, 2023, amounted to $2.8 million, a decrease of $1.3 million, or 32%, compared to the three months ended June 30, 2022.
- Non-interest income for the three months ended June 30, 2023 included losses on sales of debt securities of $2.4 million and gains on equity securities of $189 thousand. Non-interest income during the three months ended June 30, 2022 had no losses on sales of debt securities and losses on equity securities of $429 thousand.
- Excluding the items above, non-interest income increased $487 thousand, or 11%, due primarily to an increase in deposit and interchange fees of $295 thousand.
Non-Interest Expense
Non-interest expense for the three months ended June 30, 2023, amounted to $25.6 million, a decrease of $1.2 million, or 5%, compared to the three months ended June 30, 2022. The decrease resulted primarily from a decrease in salaries and employee benefits of $1.6 million, due primarily to the receipt of $3.4 million in ERC, which were recognized as a reduction to salary and benefits expense.
- Excluding the ERC, non-interest expense increased $2.2 million, or 8%, due primarily to an increase in salaries and benefits of $1.8 million, or 10%.
- The increase in non-interest expense, excluding the ERC, was also impacted by increases in advertising and public relations expenses of $244 thousand and deposit insurance premiums of $249 thousand, partially offset by a decrease in technology and telecommunications expenses of $283 thousand.
Income Taxes
The effective tax rate was 25.6% and 23.7% for the three months ended June 30, 2023 and 2022, respectively. The increase in the effective tax rate for the current quarter compared to the prior year quarter resulted primarily from the transfers of funds from the Bank's investment subsidiary corporations and a partially non-deductible loss on the sale of debt securities. The Company established a valuation allowance against the capital loss carryforward deferred tax asset which resulted from the sale of securities. The effective tax rate was 24.2% and 23.2% for the six months ended June 30, 2023 and 2022, respectively.
Balance Sheet
Total assets amounted to $4.50 billion at June 30, 2023, compared to $4.44 billion at December 31, 2022, an increase of $64.0 million, or 1%.
Total interest-earning deposits with banks, which consist of overnight and short-term investments, amounted to $208.8 million at June 30, 2023, compared to $230.7 million at December 31, 2022, a decrease of $21.9 million, or 9%. The decrease was due primarily to the funding of loan growth, partially offset by sales of debt securities, investment cash flows and deposit growth.
Total investment securities at fair value amounted to $712.9 million at June 30, 2023, compared to $820.4 million at December 31, 2022, a decrease of $107.5 million, or 13%. The decrease was attributable principally to $84.8 million in sales of debt securities and, to a lesser extent, principal pay downs, calls and maturities. Net unrealized losses on the debt securities portfolio, which were attributable to an increase in market interest rates, amounted to $113.1 million at June 30, 2023 and $124.1 million at December 31, 2022. Management has determined that no allowance for credit losses ("ACL") for available-for-sale securities was necessary as of June 30, 2023.
Total loans amounted to $3.35 billion at June 30, 2023, compared to $3.18 billion at December 31, 2022, an increase of $165.1 million, or 5%. Growth during the six months ended June 30, 2023 was primarily in commercial real estate of $87.9 million, or 5%, and commercial construction of $63.0 million, or 15%.
Customer deposits amounted to $4.08 billion at June 30, 2023, compared to $4.04 billion at December 31, 2022, an increase of $39.8 million, or 1%. The deposit balance at June 30, 2023 was positively impacted by a large deposit received in March 2023 of approximately $60.0 million that management believes may be temporary in nature and resulted from a customer business transaction. In addition, the Company experienced a shift in deposit mix at June 30, 2023, compared to December 31, 2022, resulting from customers moving funds out of lower yielding checking and savings accounts (which together, decreased 3%) into higher yielding money market and certificate of deposit products (which together, increased 7%).
Deposit portfolio segmentation at June 30, 2023, compared to December 31, 2022, was as follows:
- Checking accounts represented 48% of total deposits, compared to 51%.
- Savings and money market accounts represented 41% of total deposits, compared to 42%.
- Certificates of deposit accounts represented 10% of total deposits, compared to 7%.
Shareholders' Equity & Regulatory Capital
Total shareholders' equity amounted to $307.5 million at June 30, 2023, compared to $282.3 million at December 31, 2022, an increase of $25.2 million, or 9%. The increase was due primarily to an increase in retained earnings and a decrease in the accumulated other comprehensive loss ("AOCL"), which resulted from an increase in the fair value of debt securities.
Total capital and tier 1 capital to risk weighted assets, of which AOCL is not a component, amounted to 13.37% and 10.52%, respectively, at June 30, 2023 compared to 13.49% and 10.56%, respectively, at December 31, 2022. The decreases were driven primarily by commercial loan growth, partially offset by an increase in retained earnings during the period.
Credit Quality
The increases in the ACL for loans and reserve for unfunded commitments compared to December 31, 2022, as noted below, resulted primarily from an increased probability and severity of forecasted economic conditions in our allowance model, and to a lesser extent, growth in the Company's loan portfolio and off-balance sheet commitments.
- The ACL for loans amounted to $56.9 million, or 1.70% of total loans, at June 30, 2023, compared to $52.6 million, or 1.66% of total loans, at December 31, 2022.
- The reserve for unfunded commitments (included in other liabilities) amounted to $5.0 million at June 30, 2023, compared to $4.3 million at December 31, 2022.
- Non-performing loans amounted to $7.6 million, or 0.23% of total loans, at June 30, 2023, compared to $6.1 million, or 0.19% of total loans, at December 31, 2022.
- Net charge-offs for the three months ended June 30, 2023, amounted to $146 thousand, compared to net recoveries of $84 thousand for the three months ended June 30, 2022.
Liquidity & Funding Capacity
All balances and ratios presented in this section are at June 30, 2023 unless otherwise indicated.
- Overnight and short-term investment amounted to $208.8 million, which were reported on the Company's consolidated balance sheet as interest-earning deposits with banks.
- Uninsured deposits amounted to 36% of total deposits.
- Deposit balances that utilize third party enhanced Federal Deposit Insurance Corporation ("FDIC") insured products amounted to $796.8 million. Additional capacity to utilize these enhanced FDIC insured products exceeds the Company's total deposits balance.
- There were no brokered deposits outstanding. Borrowed funds amounted to $3.3 million and related to the Company's participation in specific pass-through community development programs under the Federal Home Loan Bank of Boston ("FHLB") and, to a lesser extent, the New Hampshire Business Finance Authority.
- FHLB and Federal Reserve Bank of Boston secured borrowing capacity amounted to $1.1 billion.
- The Company has several brokered deposit relationships (unsecured borrowings) which management estimated could provide an additional $800.0 million in funding capacity.
Wealth Management
Wealth assets under management and wealth assets under administration, which are not carried as assets on the Company's consolidated balance sheets, amounted to $1.0 billion and $214.1 million, respectively, at June 30, 2023, representing increases of $117.9 million, or 13%, and $15.5 million, or 8%, respectively, compared to December 31, 2022. The increase in assets under management resulted from an increase in market values as well as assets attracted through new and expanded client relationships.
About Enterprise Bancorp, Inc.
Enterprise Bancorp, Inc. is a Massachusetts corporation that conducts substantially all its operations through Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank, and has reported 135 consecutive profitable quarters. Enterprise Bank is principally engaged in the business of attracting deposits from the general public and investing in commercial loans and investment securities. Through Enterprise Bank and its subsidiaries, the Company offers a range of commercial, residential and consumer loan products, deposit products and cash management services, electronic and digital banking options, as well as wealth management, and trust services. The Company's headquarters and Enterprise Bank's main office are located at 222 Merrimack Street in Lowell, Massachusetts. The Company's primary market area is the Northern Middlesex, Northern Essex, and Northern Worcester counties of Massachusetts and the Southern Hillsborough and Southern Rockingham counties in New Hampshire. Enterprise Bank has 27 full-service branches located in the Massachusetts communities of Acton, Andover, Billerica (2), Chelmsford (2), Dracut, Fitchburg, Lawrence, Leominster, Lexington, Lowell (2), Methuen, North Andover, Tewksbury (2), Tyngsborough and Westford and in the New Hampshire communities of Derry, Hudson, Londonderry, Nashua (2), Pelham, Salem and Windham.
Forward-Looking Statements
This earnings release contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by references to a future period or periods or by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," "could," "plan," and other similar terms or expressions. Forward-looking statements should not be relied on because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties, and other factors may cause the actual results, performance, and achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences include, but are not limited to, general economic conditions, potential recession in the United States and our market areas, the impacts related to or resulting from recent bank failures and any continuation of the recent uncertainty in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response thereto, increased competition for deposits and related changes in deposit customer behavior, changes in market interest rates, the persistence of the current inflationary environment in our market areas and the United States, the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System, the effects of declines in housing prices in the United States and our market areas, increases in unemployment rates in the United States and our market areas, declines in commercial real estate prices, uncertainty regarding United States fiscal debt and budget matters, severe weather, natural disasters, acts of war or terrorism or other external events, regulatory considerations, competition and market expansion opportunities, changes in non-interest expenditures or in the anticipated benefits of such expenditures, the receipt of required regulatory approvals, changes in tax laws, and current or future litigation, regulatory examinations or other legal and/or regulatory actions. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. For more information about these factors, please see our reports filed with or furnished to the U.S. Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Any forward-looking statements contained in this earnings release are made as of the date hereof, and we undertake no duty, and specifically disclaim any duty, to update or revise any such statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
| ENTERPRISE BANCORP, INC. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (unaudited) | ||||||||
| (Dollars in thousands, except per share data) | June 30, 2023 | December 31, 2022 | ||||||
| Assets | ||||||||
| Cash and cash equivalents: | ||||||||
| Cash and due from banks | $ | 49,996 | $ | 36,901 | ||||
| Interest-earning deposits with banks | 208,829 | 230,688 | ||||||
| Total cash and cash equivalents | 258,825 | 267,589 | ||||||
| Investments: | ||||||||
| Debt securities at fair value (amortized cost of $820,004 and $940,227, respectively) | 706,953 | 816,102 | ||||||
| Equity securities at fair value | 5,898 | 4,269 | ||||||
| Total investment securities at fair value | 712,851 | 820,371 | ||||||
| Federal Home Loan Bank stock | 2,404 | 2,343 | ||||||
| Loans: | ||||||||
| Total loans | 3,345,667 | 3,180,518 | ||||||
| Allowance for credit losses | (56,899 | ) | (52,640 | ) | ||||
| Net loans | 3,288,768 | 3,127,878 | ||||||
| Premises and equipment, net | 43,603 | 44,228 | ||||||
| Lease right-of-use asset | 24,578 | 24,923 | ||||||
| Accrued interest receivable | 16,885 | 17,117 | ||||||
| Deferred income taxes, net | 48,875 | 51,981 | ||||||
| Bank-owned life insurance | 64,779 | 64,156 | ||||||
| Prepaid income taxes | 2,790 | 683 | ||||||
| Prepaid expenses and other assets | 32,330 | 11,408 | ||||||
| Goodwill | 5,656 | 5,656 | ||||||
| Total assets | $ | 4,502,344 | $ | 4,438,333 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits | $ | 4,075,598 | $ | 4,035,806 | ||||
| Borrowed funds | 3,334 | 3,216 | ||||||
| Subordinated debt | 59,340 | 59,182 | ||||||
| Lease liability | 24,148 | 24,415 | ||||||
| Accrued expenses and other liabilities | 29,161 | 31,442 | ||||||
| Accrued interest payable | 3,273 | 2,005 | ||||||
| Total liabilities | 4,194,854 | 4,156,066 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued | — | — | ||||||
| Common stock, $0.01 par value per share; 40,000,000 shares authorized; 12,244,733 and 12,133,516 shares issued and outstanding, respectively | 122 | 121 | ||||||
| Additional paid-in capital | 105,552 | 103,793 | ||||||
| Retained earnings | 289,409 | 274,560 | ||||||
| Accumulated other comprehensive loss | (87,593 | ) | (96,207 | ) | ||||
| Total shareholders' equity | 307,490 | 282,267 | ||||||
| Total liabilities and shareholders' equity | $ | 4,502,344 | $ | 4,438,333 | ||||
| ENTERPRISE BANCORP, INC. | ||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (Dollars in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Loans and loans held for sale | $ | 41,798 | $ | 32,148 | $ | 81,354 | $ | 62,843 | ||||||||
| Investment securities | 4,967 | 4,781 | 10,040 | 9,369 | ||||||||||||
| Other interest-earning assets | 1,917 | 393 | 4,125 | 574 | ||||||||||||
| Total interest and dividend income | 48,682 | 37,322 | 95,519 | 72,786 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 9,692 | 671 | 15,679 | 1,271 | ||||||||||||
| Borrowed funds | 30 | 13 | 42 | 26 | ||||||||||||
| Subordinated debt | 867 | 817 | 1,734 | 1,635 | ||||||||||||
| Total interest expense | 10,589 | 1,501 | 17,455 | 2,932 | ||||||||||||
| Net interest income | 38,093 | 35,821 | 78,064 | 69,854 | ||||||||||||
| Provision for credit losses | 2,268 | 2,409 | 5,004 | 2,939 | ||||||||||||
| Net interest income after provision for credit losses | 35,825 | 33,412 | 73,060 | 66,915 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Wealth management fees | 1,673 | 1,610 | 3,260 | 3,339 | ||||||||||||
| Deposit and interchange fees | 2,295 | 2,000 | 4,343 | 3,802 | ||||||||||||
| Income on bank-owned life insurance, net | 316 | 295 | 623 | 590 | ||||||||||||
| Net (losses) gains on sales of debt securities | (2,419 | ) | — | (2,419 | ) | 1,062 | ||||||||||
| Net gains on sales of loans | 6 | — | 20 | 22 | ||||||||||||
| Gains (losses) on equity securities | 189 | (429 | ) | 173 | (495 | ) | ||||||||||
| Other income | 759 | 656 | 1,576 | 1,407 | ||||||||||||
| Total non-interest income | 2,819 | 4,132 | 7,576 | 9,727 | ||||||||||||
| Non-interest expense: | ||||||||||||||||
| Salaries and employee benefits | 16,135 | 17,743 | 34,656 | 34,535 | ||||||||||||
| Occupancy and equipment expenses | 2,505 | 2,364 | 5,006 | 4,779 | ||||||||||||
| Technology and telecommunications expenses | 2,636 | 2,919 | 5,311 | 5,555 | ||||||||||||
| Advertising and public relations expenses | 804 | 560 | 1,485 | 1,227 | ||||||||||||
| Audit, legal and other professional fees | 782 | 675 | 1,422 | 1,385 | ||||||||||||
| Deposit insurance premiums | 615 | 366 | 1,290 | 922 | ||||||||||||
| Supplies and postage expenses | 247 | 224 | 502 | 444 | ||||||||||||
| Other operating expenses | 1,899 | 2,002 | 3,991 | 3,763 | ||||||||||||
| Total non-interest expense | 25,623 | 26,853 | 53,663 | 52,610 | ||||||||||||
| Income before income taxes | 13,021 | 10,691 | 26,973 | 24,032 | ||||||||||||
| Provision for income taxes | 3,337 | 2,530 | 6,521 | 5,584 | ||||||||||||
| Net income | $ | 9,684 | $ | 8,161 | $ | 20,452 | $ | 18,448 | ||||||||
| Basic earnings per common share | $ | 0.79 | $ | 0.67 | $ | 1.68 | $ | 1.53 | ||||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.67 | $ | 1.67 | $ | 1.52 | ||||||||
| Basic weighted average common shares outstanding | 12,228,081 | 12,107,804 | 12,191,857 | 12,082,041 | ||||||||||||
| Diluted weighted average common shares outstanding | 12,244,863 | 12,151,712 | 12,218,735 | 12,136,610 | ||||||||||||
| ENTERPRISE BANCORP, INC. | ||||||||||||||||||||
| Selected Consolidated Financial Data and Ratios | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| At or for the three months ended | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | |||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Total cash and cash equivalents | $ | 258,825 | $ | 215,693 | $ | 267,589 | $ | 413,688 | $ | 306,460 | ||||||||||
| Total investment securities at fair value | 712,851 | 830,895 | 820,371 | 831,030 | 866,580 | |||||||||||||||
| Total loans | 3,345,667 | 3,230,156 | 3,180,518 | 3,109,369 | 3,084,915 | |||||||||||||||
| Allowance for credit losses | (56,899 | ) | (55,002 | ) | (52,640 | ) | (51,211 | ) | (50,703 | ) | ||||||||||
| Total assets | 4,502,344 | 4,441,896 | 4,438,333 | 4,529,820 | 4,417,447 | |||||||||||||||
| Total deposits | 4,075,598 | 4,016,156 | 4,035,806 | 4,138,038 | 4,016,814 | |||||||||||||||
| Subordinated debt | 59,340 | 59,261 | 59,182 | 59,102 | 59,039 | |||||||||||||||
| Total shareholders' equity | 307,490 | 311,318 | 282,267 | 272,193 | 285,110 | |||||||||||||||
| Total liabilities and shareholders' equity | 4,502,344 | 4,441,896 | 4,438,333 | 4,529,820 | 4,417,447 | |||||||||||||||
| Wealth Management | ||||||||||||||||||||
| Wealth assets under management | $ | 1,009,386 | $ | 930,714 | $ | 891,451 | $ | 835,661 | $ | 849,536 | ||||||||||
| Wealth assets under administration | $ | 214,116 | $ | 206,569 | $ | 198,586 | $ | 185,977 | $ | 205,646 | ||||||||||
| Shareholders' Equity Ratios | ||||||||||||||||||||
| Book value per common share | $ | 25.11 | $ | 25.47 | $ | 23.26 | $ | 22.44 | $ | 23.53 | ||||||||||
| Dividends paid per common share | $ | 0.230 | $ | 0.230 | $ | 0.205 | $ | 0.205 | $ | 0.205 | ||||||||||
| Regulatory Capital Ratios | ||||||||||||||||||||
| Total capital to risk weighted assets | 13.37 | % | 13.55 | % | 13.49 | % | 13.49 | % | 13.38 | % | ||||||||||
| Tier 1 capital to risk weighted assets(1) | 10.52 | % | 10.64 | % | 10.56 | % | 10.52 | % | 10.38 | % | ||||||||||
| Tier 1 capital to average assets | 8.62 | % | 8.47 | % | 8.10 | % | 7.89 | % | 8.03 | % | ||||||||||
| Credit Quality Data | ||||||||||||||||||||
| Non-performing loans | $ | 7,647 | $ | 7,532 | $ | 6,122 | $ | 5,717 | $ | 6,321 | ||||||||||
| Non-performing loans to total loans | 0.23 | % | 0.23 | % | 0.19 | % | 0.18 | % | 0.20 | % | ||||||||||
| Non-performing assets to total assets | 0.17 | % | 0.17 | % | 0.14 | % | 0.13 | % | 0.14 | % | ||||||||||
| ACL for loans to total loans | 1.70 | % | 1.70 | % | 1.66 | % | 1.65 | % | 1.64 | % | ||||||||||
| Income Statement Data | ||||||||||||||||||||
| Net interest income | $ | 38,093 | $ | 39,971 | $ | 42,165 | $ | 39,779 | $ | 35,821 | ||||||||||
| Provision for credit losses | 2,268 | 2,736 | 1,861 | 1,000 | 2,409 | |||||||||||||||
| Total non-interest income | 2,819 | 4,757 | 4,210 | 4,525 | 4,132 | |||||||||||||||
| Total non-interest expense | 25,623 | 28,040 | 28,167 | 27,537 | 26,853 | |||||||||||||||
| Income before income taxes | 13,021 | 13,952 | 16,347 | 15,767 | 10,691 | |||||||||||||||
| Provision for income taxes | 3,337 | 3,184 | 4,041 | 3,805 | 2,530 | |||||||||||||||
| Net income | $ | 9,684 | $ | 10,768 | $ | 12,306 | $ | 11,962 | $ | 8,161 | ||||||||||
| Income Statement Ratios | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.88 | $ | 1.01 | $ | 0.98 | $ | 0.67 | ||||||||||
| Return on average total assets | 0.88 | % | 0.99 | % | 1.08 | % | 1.05 | % | 0.76 | % | ||||||||||
| Return on average shareholders' equity | 12.63 | % | 14.67 | % | 18.08 | % | 16.47 | % | 11.24 | % | ||||||||||
| Net interest margin (tax-equivalent)(2) | 3.55 | % | 3.76 | % | 3.81 | % | 3.61 | % | 3.45 | % | ||||||||||
(1) Ratio also represents common equity tier 1 capital to risk weighted assets as of the periods presented.
(2) Tax-equivalent net interest margin is net interest income adjusted for the tax-equivalent effect associated with tax-exempt loan and investment income, expressed as a percentage of average interest-earning assets.
| ENTERPRISE BANCORP, INC. | ||||||||||||||||||||
| Consolidated Loan and Deposit Data | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Major classifications of loans at the dates indicated were as follows: | ||||||||||||||||||||
| (Dollars in thousands) | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | |||||||||||||||
| Commercial real estate | $ | 2,009,263 | $ | 1,929,544 | $ | 1,921,410 | $ | 1,886,365 | $ | 1,865,198 | ||||||||||
| Commercial and industrial | 420,095 | 423,864 | 414,490 | 413,347 | 422,006 | |||||||||||||||
| Commercial construction | 487,018 | 456,735 | 424,049 | 396,027 | 385,752 | |||||||||||||||
| SBA PPP | — | — | — | 2,725 | 15,288 | |||||||||||||||
| Total commercial loans | 2,916,376 | 2,810,143 | 2,759,949 | 2,698,464 | 2,688,244 | |||||||||||||||
| Residential mortgages | 346,523 | 335,834 | 332,632 | 321,663 | 307,131 | |||||||||||||||
| Home equity loans and lines | 74,374 | 75,809 | 79,807 | 80,882 | 81,648 | |||||||||||||||
| Consumer | 8,394 | 8,370 | 8,130 | 8,360 | 7,892 | |||||||||||||||
| Total retail loans | 429,291 | 420,013 | 420,569 | 410,905 | 396,671 | |||||||||||||||
| Total loans | 3,345,667 | 3,230,156 | 3,180,518 | 3,109,369 | 3,084,915 | |||||||||||||||
| ACL for loans | (56,899 | ) | (55,002 | ) | (52,640 | ) | (51,211 | ) | (50,703 | ) | ||||||||||
| Net loans | $ | 3,288,768 | $ | 3,175,154 | $ | 3,127,878 | $ | 3,058,158 | $ | 3,034,212 | ||||||||||
| Deposits are summarized as follows as of the periods indicated: | |||||||||||||||
| (Dollars in thousands) | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | ||||||||||
| Non-interest checking | $ | 1,273,968 | $ | 1,247,253 | $ | 1,361,588 | $ | 1,441,104 | $ | 1,457,220 | |||||
| Interest-bearing checking | 701,701 | 641,194 | 678,715 | 719,474 | 712,898 | ||||||||||
| Savings | 310,321 | 297,790 | 326,666 | 351,665 | 334,728 | ||||||||||
| Money market | 1,373,816 | 1,454,858 | 1,381,645 | 1,395,756 | 1,293,453 | ||||||||||
| CDs $250,000 or less | 244,114 | 222,116 | 187,758 | 163,520 | 144,084 | ||||||||||
| CDs greater than $250,000 | 171,678 | 152,945 | 99,434 | 66,519 | 74,431 | ||||||||||
| Deposits | $ | 4,075,598 | $ | 4,016,156 | $ | 4,035,806 | $ | 4,138,038 | $ | 4,016,814 | |||||
| ENTERPRISE BANCORP, INC. | |||||||||||||||||||||||||||
| Consolidated Average Balance Sheets and Yields (tax-equivalent basis) | |||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||
| The following table presents the Company's average balance sheets, net interest income and average rates for the periods indicated: | |||||||||||||||||||||||||||
| Three months ended June 30, 2023 | Three months ended March 31, 2023 | Three months ended June 30, 2022 | |||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | ||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||
| Loans and loans held for sale(2) (tax-equivalent) | $ | 3,268,586 | $ | 41,930 | 5.14 | % | $ | 3,200,842 | $ | 39,679 | 5.02 | % | $ | 3,020,113 | $ | 32,259 | 4.28 | % | |||||||||
| Investment securities(3) (tax-equivalent) | 917,965 | 5,189 | 2.26 | % | 937,382 | 5,300 | 2.26 | % | 969,563 | 5,012 | 2.07 | % | |||||||||||||||
| Other interest-earning assets(4) | 155,934 | 1,917 | 4.93 | % | 198,741 | 2,208 | 4.51 | % | 214,167 | 393 | 0.74 | % | |||||||||||||||
| Total interest-earnings assets (tax-equivalent) | 4,342,485 | 49,036 | 4.53 | % | 4,336,965 | 47,187 | 4.40 | % | 4,203,843 | 37,664 | 3.59 | % | |||||||||||||||
| Other assets | 92,909 | 86,580 | 115,413 | ||||||||||||||||||||||||
| Total assets | $ | 4,435,394 | $ | 4,423,545 | $ | 4,319,256 | |||||||||||||||||||||
| Liabilities and stockholders' equity: | |||||||||||||||||||||||||||
| Interest checking, savings and money market | $ | 2,351,011 | 6,880 | 1.17 | % | $ | 2,354,967 | 4,105 | 0.71 | % | $ | 2,296,268 | 456 | 0.08 | % | ||||||||||||
| CDs | 393,387 | 2,812 | 2.87 | % | 337,361 | 1,882 | 2.26 | % | 198,766 | 215 | 0.43 | % | |||||||||||||||
| Borrowed funds | 4,595 | 30 | 2.58 | % | 3,206 | 12 | 1.57 | % | 2,961 | 13 | 1.73 | % | |||||||||||||||
| Subordinated debt(5) | 59,293 | 867 | 5.85 | % | 59,213 | 867 | 5.85 | % | 59,021 | 817 | 5.54 | % | |||||||||||||||
| Total interest-bearing funding | 2,808,286 | 10,589 | 1.51 | % | 2,754,747 | 6,866 | 1.01 | % | 2,557,016 | 1,501 | 0.24 | % | |||||||||||||||
| Non-interest checking | 1,269,339 | — | 1,317,534 | — | 1,424,132 | — | |||||||||||||||||||||
| Total deposits, borrowed funds and subordinated debt | 4,077,625 | 10,589 | 1.04 | % | 4,072,281 | 6,866 | 0.68 | % | 3,981,148 | 1,501 | 0.15 | % | |||||||||||||||
| Other liabilities | 50,113 | 53,665 | 46,945 | ||||||||||||||||||||||||
| Total liabilities | 4,127,738 | 4,125,946 | 4,028,093 | ||||||||||||||||||||||||
| Stockholders' equity | 307,656 | 297,599 | 291,163 | ||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,435,394 | $ | 4,423,545 | $ | 4,319,256 | |||||||||||||||||||||
| Net interest-rate spread (tax-equivalent) | 3.02 | % | 3.39 | % | 3.35 | % | |||||||||||||||||||||
| Net interest income (tax-equivalent) | 38,447 | 40,321 | 36,163 | ||||||||||||||||||||||||
| Net interest margin (tax-equivalent) | 3.55 | % | 3.76 | % | 3.45 | % | |||||||||||||||||||||
| Less tax-equivalent adjustment | 354 | 350 | 342 | ||||||||||||||||||||||||
| Net interest income | $ | 38,093 | $ | 39,971 | $ | 35,821 | |||||||||||||||||||||
| Net interest margin | 3.52 | % | 3.73 | % | 3.42 | % | |||||||||||||||||||||
(1) Average yields and interest income are presented on a tax-equivalent basis, calculated using a U.S. federal income tax rate of 21% for each period presented, based on tax-equivalent adjustments associated with tax-exempt loans and investments interest income.
(2) Average loans and loans held for sale include non-accrual loans and are net of average deferred loan fees.
(3) Average investments are presented at average amortized cost.
(4) Average other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock.
(5) Subordinated debt is net of average deferred debt issuance costs.
Contact Info: Joseph R. Lussier, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5578
