LOWELL, Mass., April 23, 2024 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced its financial results for the three months ended March 31, 2024. Net income amounted to $8.5 million, or $0.69 per diluted common share, for the three months ended March 31, 2024, compared to $7.9 million, or $0.64 per diluted share, for the three months ended December 31, 2023 and $10.8 million, or $0.88 per diluted share, for the three months ended March 31, 2023.
Selected financial results at or for the three months ended March 31, 2024, were as follows:
- The returns on average assets and average equity were 0.75% and 10.47%, respectively.
- Tax-equivalent net interest margin (non-GAAP) ("net interest margin") was 3.20%.
- Total loans increased 2.4% compared to December 31, 2023.
- Total deposits increased 3.2% compared to December 31, 2023.
- Wealth assets under management and administration amounted to $1.37 billion and increased 4.0% compared to December 31, 2023.
Chief Executive Officer Jack Clancy commented, "The first quarter of 2024 had solid net income with strong loan and deposit growth. Higher deposit costs and the inverted yield curve continued to be a headwind resulting in a net interest margin of 3.20%. We remain well positioned with a strong balance sheet that is centered around a high-quality loan portfolio, a conservative credit and reserve culture and favorable liquidity, core deposit funding and capital." Executive Chairman & Founder George Duncan added, "Despite the higher interest rates, our markets remain economically healthy, and we continue to opportunistically add new loan, deposit and wealth management customers. I was particularly pleased with the 3% growth in total deposits."
Net Interest Income
Net interest income for the three months ended March 31, 2024, amounted to $35.2 million, a decrease of $4.8 million, or 12%, compared to the three months ended March 31, 2023. The decrease was due primarily to an increase in deposit interest expense of $11.3 million which was driven by an increase in the cost of funds and changes in deposit mix, partially offset by an increase in loan interest income of $9.3 million due to loan growth and higher market interest rates.
Net Interest Margin
Three months ended – March 31, 2024, compared to December 31, 2023
Net interest margin was 3.20% for the three months ended March 31, 2024, compared to 3.29% for the three months ended December 31, 2023.
Net interest margin compared to the prior quarter was impacted by the following factors:
- Average other interest-earning assets decreased $86.1 million, or 50%, while the yield increased 6 basis points.
- Average loan balances increased $140.2 million, or 4%, and the tax-equivalent yield increased 10 basis points.
- Average total deposits decreased $45.5 million, or 1%, while the yield increased 18 basis points.
- Average borrowed funds increased $56.1 million and the yield was 4.38%, an increase of 214 basis points from previously low levels.
Three months ended – March 31, 2024, compared to March 31, 2023
Net interest margin was 3.20% for the three months ended March 31, 2024, compared to 3.76% for the three months ended March 31, 2023.
Net interest margin compared to the prior year quarter was impacted by the following factors:
- Average other interest-earning assets decreased $112.7 million, or 57%, while the yield increased 97 basis points.
- Average investment securities decreased $173.7 million, or 19%, and the tax-equivalent yield decreased 8 basis points.
- Average loan balances increased $407.3 million, or 13%, and the tax-equivalent yield increased 44 basis points.
- Average total deposits increased $27.3 million, or 1%, and the yield increased 111 basis points.
- Average borrowed funds increased $60.4 million and the yield was 4.38%, an increase of 281 basis points from previously low levels.
The decrease in net interest margin over the respective periods was due primarily to increases in funding costs, partially offset by increases in loan yields and other interest earning asset yields as well as loan growth. Yields on loans and other interest earning assets were positively impacted by the increases of 525 basis points in the federal funds rate from March 2022 through July 2023. During the current quarter, funding costs were impacted primarily by higher market interest rates, increased competition for deposits and changes in deposit mix as depositors sought higher yielding money market and certificate of deposit products.
Provision for Credit Losses
The provision for credit losses for the three months ended March 31, 2024, amounted to $622 thousand, compared to $2.7 million for the three months ended March 31, 2023. The provision expense for the first quarter of 2024 resulted primarily from growth in the Company's loan portfolio and a $1.6 million increase in reserves on individually evaluated loans, due primarily to the addition of one commercial construction loan which was credit downgraded, partially offset by the impact of an improved economic forecast in our allowance for credit loss ("ACL") model and a decrease in off-balance sheet commitments.
Non-Interest Income
Non-interest income for the three months ended March 31, 2024, amounted to $5.5 million, an increase of $738 thousand, or 16%, compared to the three months ended March 31, 2023. The increase in non-interest income was due primarily to increases in gains on equity securities of $481 thousand, wealth management fees of $263 thousand and income on bank-owned life insurance of $151 thousand.
Non-Interest Expense
Non-interest expense for the three months ended March 31, 2024, amounted to $28.9 million, an increase of $868 thousand, or 3%, compared to the three months ended March 31, 2023. The increase in non-interest expense was due primarily to increases in salaries and benefits expense of $655 thousand and deposit insurance premiums of $184 thousand.
Balance Sheet
Total assets amounted to $4.62 billion at March 31, 2024, compared to $4.47 billion at December 31, 2023, an increase of $158.0 million, or 4%.
Total interest-earning deposits with banks, which consist of overnight and short-term investments, amounted to $106.4 million at March 31, 2024, compared to $19.1 million at December 31, 2023. The increase of $87.2 million was due primarily to increases in deposits and borrowed funds, partially offset by loan growth.
Total investment securities at fair value amounted to $652.0 million at March 31, 2024, compared to $668.2 million at December 31, 2023. The decrease of $16.1 million, or 2%, was largely attributable to principal pay-downs, calls and maturities during the three months ended March 31, 2024. Unrealized losses on debt securities amounted to $105.6 million at March 31, 2024, compared to $102.9 million at December 31, 2023, an increase of $2.8 million, or 3%. At March 31, 2024, management determined that no ACL for available-for-sale securities was necessary.
Total loans amounted to $3.65 billion at March 31, 2024, compared to $3.57 billion at December 31, 2023. The increase of $86.7 million, or 2%, was due primarily to an increase in commercial real estate loans of $94.9 million.
Total deposits amounted to $4.11 billion at March 31, 2024, compared to $3.98 billion at December 31, 2023. The increase of $128.6 million, or 3%, was due primarily to increases in money market and certificate of deposit balances of $66.2 million and $61.1 million, respectively.
Total borrowed funds amounted to $63.2 million at March 31, 2024, compared to $25.8 million at December 31, 2023. The increase of $37.5 million, or 145%, was from an increase in advances used to support the Company's operations.
Total shareholders' equity amounted to $333.4 million at March 31, 2024, compared to $329.1 million at December 31, 2023. The increase of $4.3 million, or 1%, was due primarily to an increase in retained earnings of $5.6 million, partially offset by an increase in the accumulated other comprehensive loss of $2.1 million.
Credit Quality
Selected credit quality metrics at or for the three months ended March 31, 2024, compared to December 31, 2023, were as follows:
- The ACL for loans amounted to $60.7 million, or 1.66% of total loans, compared to $59.0 million, or 1.65% of total loans.
- The reserve for unfunded commitments (included in other liabilities) amounted to $5.9 million, compared to $7.1 million.
- Non-performing loans amounted to $18.5 million, or 0.51% of total loans, compared to $11.4 million, or 0.32% of total loans. The increase in non-performing loans resulted primarily from one individually evaluated commercial construction loan which was credit downgraded and moved to non-accrual in the first quarter of 2024, as noted above.
Annualized net charge-offs to average total loans remained low and amounted to 0.01% for the three months ended March 31, 2024, compared to annualized net recoveries to average total loans of 0.01% for the three months ended March 31, 2023.
Wealth Management
Wealth assets are not carried as assets on the Company's consolidated balance sheets.
Wealth assets under management amounted to $1.11 billion at March 31, 2024, an increase of $27.3 million, or 3%, compared to December 31, 2023.
Wealth assets under administration amounted to $268.1 million at March 31, 2024, an increase of $25.7 million, or 11%, compared to December 31, 2023, resulting primarily from an increase in market values as well as net asset growth.
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 138 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, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; potential recession in the United States and our market areas; the impacts related to or resulting from bank failures and any continuation of 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; the impact of changes in market interest rates, whether due to continued elevated interest rates or potential reductions in interest rates and a resulting decline in net interest income; the persistence of the current inflationary pressures, or the resurgence of elevated levels of inflation, 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 values and prices; uncertainty regarding United States fiscal debt and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; changes in tax laws; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential increased regulatory requirements and costs related to the transition and physical impacts of climate change; 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) | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| Assets | ||||||||||||
| Cash and cash equivalents: | ||||||||||||
| Cash and due from banks | $ | 41,443 | $ | 37,443 | $ | 42,843 | ||||||
| Interest-earning deposits with banks | 106,391 | 19,149 | 172,850 | |||||||||
| Total cash and cash equivalents | 147,834 | 56,592 | 215,693 | |||||||||
| Investments: | ||||||||||||
| Debt securities at fair value (amortized cost of $749,561, $763,981 and $923,485, respectively) | 643,924 | 661,113 | 825,520 | |||||||||
| Equity securities at fair value | 8,102 | 7,058 | 5,375 | |||||||||
| Total investment securities at fair value | 652,026 | 668,171 | 830,895 | |||||||||
| Federal Home Loan Bank stock | 2,482 | 2,402 | 2,343 | |||||||||
| Loans held for sale | 400 | 200 | 362 | |||||||||
| Loans: | ||||||||||||
| Total loans | 3,654,322 | 3,567,631 | 3,230,156 | |||||||||
| Allowance for credit losses | (60,741 | ) | (58,995 | ) | (55,002 | ) | ||||||
| Net loans | 3,593,581 | 3,508,636 | 3,175,154 | |||||||||
| Premises and equipment, net | 44,671 | 44,931 | 43,821 | |||||||||
| Lease right-of-use asset | 24,645 | 24,820 | 24,751 | |||||||||
| Accrued interest receivable | 20,501 | 19,233 | 18,540 | |||||||||
| Deferred income taxes, net | 47,903 | 49,166 | 44,432 | |||||||||
| Bank-owned life insurance | 65,878 | 65,455 | 64,463 | |||||||||
| Prepaid income taxes | 5,771 | 1,589 | 3,636 | |||||||||
| Prepaid expenses and other assets | 12,667 | 19,183 | 12,150 | |||||||||
| Goodwill | 5,656 | 5,656 | 5,656 | |||||||||
| Total assets | $ | 4,624,015 | $ | 4,466,034 | $ | 4,441,896 | ||||||
| Liabilities and Shareholders'Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | $ | 4,106,119 | $ | 3,977,521 | $ | 4,016,156 | ||||||
| Borrowed funds | 63,246 | 25,768 | 3,199 | |||||||||
| Subordinated debt | 59,577 | 59,498 | 59,261 | |||||||||
| Lease liability | 24,303 | 24,441 | 24,285 | |||||||||
| Accrued expenses and other liabilities | 30,945 | 45,011 | 25,737 | |||||||||
| Accrued interest payable | 6,386 | 4,678 | 1,940 | |||||||||
| Total liabilities | 4,290,576 | 4,136,917 | 4,130,578 | |||||||||
| 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; 12,376,562, 12,272,674 and 12,222,717 shares issued and outstanding, respectively | 124 | 123 | 122 | |||||||||
| Additional paid-in capital | 108,246 | 107,377 | 104,621 | |||||||||
| Retained earnings | 306,943 | 301,380 | 282,534 | |||||||||
| Accumulated other comprehensive loss | (81,874 | ) | (79,763 | ) | (75,959 | ) | ||||||
| Total shareholders' equity | 333,439 | 329,117 | 311,318 | |||||||||
| Total liabilities and shareholders' equity | $ | 4,624,015 | $ | 4,466,034 | $ | 4,441,896 | ||||||
| ENTERPRISE BANCORP, INC. | ||||||||||||
| Consolidated Statements of Income | ||||||||||||
| (unaudited) | ||||||||||||
| Three months ended | ||||||||||||
| (Dollars in thousands, except per share data) | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| Interest and dividend income: | ||||||||||||
| Other interest-earning assets | $ | 1,172 | $ | 2,350 | $ | 2,208 | ||||||
| Investment securities | 4,034 | 4,219 | 5,073 | |||||||||
| Loans and loans held for sale | 48,817 | 46,680 | 39,556 | |||||||||
| Total interest and dividend income | 54,023 | 53,249 | 46,837 | |||||||||
| Interest expense: | ||||||||||||
| Deposits | 17,272 | 15,821 | 5,987 | |||||||||
| Borrowed funds | 694 | 43 | 12 | |||||||||
| Subordinated debt | 867 | 867 | 867 | |||||||||
| Total interest expense | 18,833 | 16,731 | 6,866 | |||||||||
| Net interest income | 35,190 | 36,518 | 39,971 | |||||||||
| Provision for credit losses | 622 | 2,493 | 2,736 | |||||||||
| Net interest income after provision for credit losses | 34,568 | 34,025 | 37,235 | |||||||||
| Non-interest income: | ||||||||||||
| Wealth management fees | 1,850 | 1,797 | 1,587 | |||||||||
| Deposit and interchange fees | 2,069 | 2,145 | 2,048 | |||||||||
| Income on bank-owned life insurance, net | 458 | 314 | 307 | |||||||||
| Net gains on sales of loans | 22 | — | 14 | |||||||||
| Gains (losses) on equity securities | 465 | 674 | (16 | ) | ||||||||
| Other income | 631 | 617 | 817 | |||||||||
| Total non-interest income | 5,495 | 5,547 | 4,757 | |||||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 19,176 | 18,468 | 18,521 | |||||||||
| Occupancy and equipment expenses | 2,459 | 2,283 | 2,501 | |||||||||
| Technology and telecommunications expenses | 2,745 | 2,719 | 2,675 | |||||||||
| Advertising and public relations expenses | 743 | 709 | 681 | |||||||||
| Audit, legal and other professional fees | 734 | 788 | 640 | |||||||||
| Deposit insurance premiums | 859 | 768 | 675 | |||||||||
| Supplies and postage expenses | 237 | 245 | 255 | |||||||||
| Other operating expenses | 1,955 | 2,244 | 2,092 | |||||||||
| Total non-interest expense | 28,908 | 28,224 | 28,040 | |||||||||
| Income before income taxes | 11,155 | 11,348 | 13,952 | |||||||||
| Provision for income taxes | 2,648 | 3,441 | 3,184 | |||||||||
| Net income | $ | 8,507 | $ | 7,907 | $ | 10,768 | ||||||
| Basic earnings per common share | $ | 0.69 | $ | 0.64 | $ | 0.89 | ||||||
| Diluted earnings per common share | $ | 0.69 | $ | 0.64 | $ | 0.88 | ||||||
| Basic weighted average common shares outstanding | 12,292,417 | 12,261,918 | 12,155,320 | |||||||||
| Diluted weighted average common shares outstanding | 12,304,203 | 12,276,769 | 12,193,756 | |||||||||
| ENTERPRISE BANCORP, INC. | ||||||||||||||||||||
| Selected Consolidated Financial Data and Ratios | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| At or for the three months ended | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Total cash and cash equivalents | $ | 147,834 | $ | 56,592 | $ | 225,421 | $ | 258,825 | $ | 215,693 | ||||||||||
| Total investment securities at fair value | 652,026 | 668,171 | 678,932 | 712,851 | 830,895 | |||||||||||||||
| Total loans | 3,654,322 | 3,567,631 | 3,404,014 | 3,345,667 | 3,230,156 | |||||||||||||||
| Allowance for credit losses | (60,741 | ) | (58,995 | ) | (57,905 | ) | (56,899 | ) | (55,002 | ) | ||||||||||
| Total assets | 4,624,015 | 4,466,034 | 4,482,374 | 4,502,344 | 4,441,896 | |||||||||||||||
| Total deposits | 4,106,119 | 3,977,521 | 4,060,403 | 4,075,598 | 4,016,156 | |||||||||||||||
| Borrowed funds | 63,246 | 25,768 | 4,290 | 3,334 | 3,199 | |||||||||||||||
| Subordinated debt | 59,577 | 59,498 | 59,419 | 59,340 | 59,261 | |||||||||||||||
| Total shareholders' equity | 333,439 | 329,117 | 299,699 | 307,490 | 311,318 | |||||||||||||||
| Total liabilities and shareholders' equity | 4,624,015 | 4,466,034 | 4,482,374 | 4,502,344 | 4,441,896 | |||||||||||||||
| Wealth Management | ||||||||||||||||||||
| Wealth assets under management | $ | 1,105,036 | $ | 1,077,761 | $ | 984,647 | $ | 1,009,386 | $ | 930,714 | ||||||||||
| Wealth assets under administration | $ | 268,074 | $ | 242,338 | $ | 211,046 | $ | 214,116 | $ | 206,569 | ||||||||||
| Shareholders' Equity Ratios | ||||||||||||||||||||
| Book value per common share | $ | 26.94 | $ | 26.82 | $ | 24.45 | $ | 25.11 | $ | 25.47 | ||||||||||
| Dividends paid per common share | $ | 0.24 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | ||||||||||
| Regulatory Capital Ratios | ||||||||||||||||||||
| Total capital to risk weighted assets | 13.20 | % | 13.12 | % | 13.45 | % | 13.37 | % | 13.55 | % | ||||||||||
| Tier 1 capital to risk weighted assets(1) | 10.43 | % | 10.34 | % | 10.61 | % | 10.52 | % | 10.64 | % | ||||||||||
| Tier 1 capital to average assets | 8.85 | % | 8.74 | % | 8.59 | % | 8.62 | % | 8.47 | % | ||||||||||
| Credit Quality Data | ||||||||||||||||||||
| Non-performing loans | $ | 18,527 | $ | 11,414 | $ | 11,656 | $ | 7,647 | $ | 7,532 | ||||||||||
| Non-performing loans to total loans | 0.51 | % | 0.32 | % | 0.34 | % | 0.23 | % | 0.23 | % | ||||||||||
| Non-performing assets to total assets | 0.40 | % | 0.26 | % | 0.26 | % | 0.17 | % | 0.17 | % | ||||||||||
| ACL for loans to total loans | 1.66 | % | 1.65 | % | 1.70 | % | 1.70 | % | 1.70 | % | ||||||||||
| Net charge-offs (recoveries) | $ | 122 | $ | 15 | $ | (12 | ) | $ | 146 | $ | (44 | ) | ||||||||
| Income Statement Data | ||||||||||||||||||||
| Net interest income | $ | 35,190 | $ | 36,518 | $ | 38,502 | $ | 38,093 | $ | 39,971 | ||||||||||
| Provision for credit losses | 622 | 2,493 | 1,752 | 2,268 | 2,736 | |||||||||||||||
| Total non-interest income | 5,495 | 5,547 | 4,486 | 2,819 | 4,757 | |||||||||||||||
| Total non-interest expense | 28,908 | 28,224 | 28,312 | 25,623 | 28,040 | |||||||||||||||
| Income before income taxes | 11,155 | 11,348 | 12,924 | 13,021 | 13,952 | |||||||||||||||
| Provision for income taxes | 2,648 | 3,441 | 3,225 | 3,337 | 3,184 | |||||||||||||||
| Net income | $ | 8,507 | $ | 7,907 | $ | 9,699 | $ | 9,684 | $ | 10,768 | ||||||||||
| Income Statement Ratios | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.69 | $ | 0.64 | $ | 0.79 | $ | 0.79 | $ | 0.88 | ||||||||||
| Return on average total assets | 0.75 | % | 0.69 | % | 0.85 | % | 0.88 | % | 0.99 | % | ||||||||||
| Return on average shareholders' equity | 10.47 | % | 10.21 | % | 12.53 | % | 12.63 | % | 14.67 | % | ||||||||||
| Net interest margin (tax-equivalent)(2) | 3.20 | % | 3.29 | % | 3.46 | % | 3.55 | % | 3.76 | % | ||||||||||
| (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) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Commercial real estate | $ | 2,159,594 | $ | 2,064,737 | $ | 2,032,458 | $ | 2,009,263 | $ | 1,929,544 | ||||||||||
| Commercial and industrial | 417,604 | 430,749 | 425,334 | 420,095 | 423,864 | |||||||||||||||
| Commercial construction | 583,711 | 585,113 | 501,179 | 487,018 | 456,735 | |||||||||||||||
| Total commercial loans | 3,160,909 | 3,080,599 | 2,958,971 | 2,916,376 | 2,810,143 | |||||||||||||||
| Residential mortgages | 400,093 | 393,142 | 362,514 | 346,523 | 335,834 | |||||||||||||||
| Home equity loans and lines | 85,144 | 85,375 | 74,433 | 74,374 | 75,809 | |||||||||||||||
| Consumer | 8,176 | 8,515 | 8,096 | 8,394 | 8,370 | |||||||||||||||
| Total retail loans | 493,413 | 487,032 | 445,043 | 429,291 | 420,013 | |||||||||||||||
| Total loans | 3,654,322 | 3,567,631 | 3,404,014 | 3,345,667 | 3,230,156 | |||||||||||||||
| ACL for loans | (60,741 | ) | (58,995 | ) | (57,905 | ) | (56,899 | ) | (55,002 | ) | ||||||||||
| Net loans | $ | 3,593,581 | $ | 3,508,636 | $ | 3,346,109 | $ | 3,288,768 | $ | 3,175,154 | ||||||||||
| Deposits are summarized as follows as of the periods indicated: | ||||||||||||||||||||
| (Dollars in thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Non-interest checking | $ | 1,050,608 | $ | 1,070,104 | $ | 1,130,732 | $ | 1,273,968 | $ | 1,247,253 | ||||||||||
| Interest-bearing checking | 730,819 | 697,632 | 727,817 | 701,701 | 641,194 | |||||||||||||||
| Savings | 273,369 | 285,770 | 290,363 | 310,321 | 297,790 | |||||||||||||||
| Money market | 1,469,181 | 1,402,939 | 1,434,036 | 1,373,816 | 1,454,858 | |||||||||||||||
| CDs $250,000 or less | 337,367 | 295,789 | 262,975 | 244,114 | 222,116 | |||||||||||||||
| CDs greater than $250,000 | 244,775 | 225,287 | 214,480 | 171,678 | 152,945 | |||||||||||||||
| Deposits | $ | 4,106,119 | $ | 3,977,521 | $ | 4,060,403 | $ | 4,075,598 | $ | 4,016,156 | ||||||||||
| 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 March 31, 2024 | Three Months Ended December 31, 2023 | Three months ended March 31, 2023 | |||||||||||||||||||||||||
| (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: | |||||||||||||||||||||||||||
| Other interest-earning assets(2) | $ | 86,078 | $ | 1,172 | 5.48 | % | $ | 172,167 | $ | 2,350 | 5.42 | % | $ | 198,741 | $ | 2,208 | 4.51 | % | |||||||||
| Investment securities(3) (tax-equivalent) | 763,692 | 4,157 | 2.18 | % | 799,093 | 4,345 | 2.17 | % | 937,382 | 5,300 | 2.26 | % | |||||||||||||||
| Loans and loans held for sale(4) (tax-equivalent) | 3,608,157 | 48,960 | 5.46 | % | 3,467,945 | 46,824 | 5.36 | % | 3,200,842 | 39,679 | 5.02 | % | |||||||||||||||
| Total interest-earnings assets (tax-equivalent) | 4,457,927 | 54,289 | 4.89 | % | 4,439,205 | 53,519 | 4.79 | % | 4,336,965 | 47,187 | 4.40 | % | |||||||||||||||
| Other assets | 91,794 | 78,102 | 86,580 | ||||||||||||||||||||||||
| Total assets | $ | 4,549,721 | $ | 4,517,307 | $ | 4,423,545 | |||||||||||||||||||||
| Liabilities and stockholders' equity: | |||||||||||||||||||||||||||
| Non-interest checking | $ | 1,069,145 | — | $ | 1,155,307 | — | $ | 1,317,534 | — | ||||||||||||||||||
| Interest checking, savings and money market | 2,418,947 | 11,356 | 1.89 | % | 2,427,089 | 10,786 | 1.76 | % | 2,354,967 | 4,105 | 0.71 | % | |||||||||||||||
| CDs | 549,097 | 5,916 | 4.33 | % | 500,286 | 5,035 | 3.99 | % | 337,361 | 1,882 | 2.26 | % | |||||||||||||||
| Total deposits | 4,037,189 | 17,272 | 1.72 | % | 4,082,682 | 15,821 | 1.54 | % | 4,009,862 | 5,987 | 0.61 | % | |||||||||||||||
| Borrowed funds | 63,627 | 694 | 4.38 | % | 7,572 | 43 | 2.24 | % | 3,206 | 12 | 1.57 | % | |||||||||||||||
| Subordinated debt(5) | 59,530 | 867 | 5.82 | % | 59,451 | 867 | 5.83 | % | 59,213 | 867 | 5.85 | % | |||||||||||||||
| Total funding liabilities | 4,160,346 | 18,833 | 1.82 | % | 4,149,705 | 16,731 | 1.60 | % | 4,072,281 | 6,866 | 0.68 | % | |||||||||||||||
| Other liabilities | 62,500 | 60,376 | 53,665 | ||||||||||||||||||||||||
| Total liabilities | 4,222,846 | 4,210,081 | 4,125,946 | ||||||||||||||||||||||||
| Stockholders' equity | 326,875 | 307,226 | 297,599 | ||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,549,721 | $ | 4,517,307 | $ | 4,423,545 | |||||||||||||||||||||
| Net interest-rate spread (tax-equivalent) | 3.07 | % | 3.19 | % | 3.72 | % | |||||||||||||||||||||
| Net interest income (tax-equivalent) | 35,456 | 36,788 | 40,321 | ||||||||||||||||||||||||
| Net interest margin (tax-equivalent) | 3.20 | % | 3.29 | % | 3.76 | % | |||||||||||||||||||||
| Less tax-equivalent adjustment | 266 | 270 | 350 | ||||||||||||||||||||||||
| Net interest income | $ | 35,190 | $ | 36,518 | $ | 39,971 | |||||||||||||||||||||
| Net interest margin | 3.17 | % | 3.27 | % | 3.73 | % | |||||||||||||||||||||
| (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 other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock. | |||||||||||||||||||||||||||
| (3) Average investment securities are presented at average amortized cost. | |||||||||||||||||||||||||||
| (4) Average loans and loans held for sale are presented at average amortized cost and include non-accrual loans. | |||||||||||||||||||||||||||
| (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
