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 IncomeNet 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 IncomeNet 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 MarginThree 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 LossesThe 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 IncomeNon-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 ExpenseNon-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 TaxesThe 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 SheetTotal 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 CapitalTotal 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 QualityThe 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 CapacityAll 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 ManagementWealth 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 StatementsThis 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) |
|
AverageBalance |
|
Interest(1) |
|
AverageYield(1) |
|
AverageBalance |
|
Interest(1) |
|
AverageYield(1) |
|
AverageBalance |
|
Interest(1) |
|
AverageYield(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
Enterprise Bancorp (NASDAQ:EBTC)
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Enterprise Bancorp (NASDAQ:EBTC)
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