LOWELL, Mass., Oct. 24, 2023 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ:EBTC), parent of Enterprise Bank, announced its financial results for the three months ended September 30, 2023. Net income amounted to $9.7 million, or $0.79 per diluted common share, for the three months ended September 30, 2023, compared to $12.0 million, or $0.98, for the three months ended September 30, 2022 and $9.7 million, or $0.79, for the three months ended June 30, 2023.
Selected financial results at or for the three months ended September 30, 2023, were as follows:
- The return on average assets and average equity were 0.85% and 12.53%, respectively.
- Tax-equivalent net interest margin (non-GAAP) was 3.46%.
- Total loans increased 2% compared to June 30, 2023, and 9% compared to September 30, 2022.
- Total deposits decreased 0.4% compared to June 30, 2023, and 2% compared to September 30, 2022.
- Overnight and short-term investments (interest-earning deposits with banks) amounted to $180.1 million.
- There were no brokered deposits and only $4.3 million in borrowed funds.
Chief Executive Officer Jack Clancy commented, "We are pleased with our third quarter results. Liquidity remained favorable and loan growth has been solid and consistent. While increasing funding costs remain a challenge, we continue to experience strong growth opportunities in our markets for our commercial lending, cash management and wealth management services."
Executive Chairman & Founder George Duncan added, "I am pleased to highlight that on October 17th, the Company's Board of Directors declared a quarterly dividend of $0.23 per share, an increase of 12% over the prior year period. On September 7th, we were once again recognized at the Boston Business Journal's Corporate Citizenship Summit for our significant contributions in employee volunteerism and corporate philanthropy. In particular, I am very proud that we ranked 2nd in the state of Massachusetts for the highest average volunteer hours per employee."
Net Interest Income
Net interest income for the three months ended September 30, 2023, amounted to $38.5 million, a decrease of $1.3 million, or 3%, compared to the three months ended September 30, 2022. The decrease was due largely to an increase in deposit interest expense of $11.4 million which resulted from continued market interest rate increases and a change in deposit mix, partially offset by increases in loan interest income of $9.2 million and other interest-earning asset income of $1.4 million.
Net Interest Margin
The decrease in net interest margin over the respective periods was due primarily to an increase in funding costs that exceeded the increase in loan yields. During the periods, the cost of deposits increased from higher market and competitor interest rates and from a change in mix as deposits migrated from lower yielding checking and savings products into higher yielding money market and certificate of deposit products.
Three months ended – September 30, 2023, compared to June 30, 2023
Tax-equivalent net interest margin ("net interest margin") was 3.46% for the three months ended September 30, 2023, compared to 3.55% for the three months ended June 30, 2023.
Net interest margin compared to the prior quarter was impacted by the following factors:
- Average interest-earning deposits with banks increased $104.5 million, or 68%, and the yield increased 40 basis points.
- Average debt securities decreased $98.1 million, or 11%, and the tax-equivalent yield decreased 9 basis points.
- Average loan balances increased $104.2 million, or 3%, and the tax-equivalent yield increased 11 basis points.
- Average total deposits increased $94.1 million, or 2%, and the yield increased 27 basis points.
Three months ended – September 30, 2023, compared to September 30, 2022
Net interest margin was 3.46% for the three months ended September 30, 2023, compared to 3.61% for the three months ended September 30, 2022.
Net interest margin compared to the prior year quarter was impacted by the following factors:
- Average interest-earning deposits with banks decreased $114.8 million, or 31%, while the yield increased 308 basis points.
- Average debt securities decreased $136.8 million, or 14%, while the tax-equivalent yield increased 10 basis points.
- Average loan balances increased $286.9 million, or 9%, and the tax-equivalent yield increased 69 basis points.
- Average total deposits decreased $8.6 million, while the yield increased 110 basis points.
Provision for Credit Losses
The provision for credit losses for the three months ended September 30, 2023, amounted to $1.8 million, compared to $1.0 million for the three months ended September 30, 2022. The provision expense for the third quarter of 2023 resulted primarily from an increase in reserves for individually evaluated loans and, to a lesser extent, growth in the Company's loan portfolio and off-balance sheet commitments, partially offset by the impact of a reduction in general reserve loss factors in our allowance for credit loss ("ACL") model related primarily to an improvement in the economic forecast relative to the prior quarter. The ACL for loans to total loans ratio was 1.70% at September 30, 2023 compared to 1.65% at September 30, 2022.
Non-Interest Income
Non-interest income for the three months ended September 30, 2023, amounted to $4.5 million, a decrease of $39 thousand, or 1%, compared to the three months ended September 30, 2022. There were no individually significant changes in non-interest income during the period when compared to the prior year period.
Non-Interest Expense
Non-interest expense for the three months ended September 30, 2023, amounted to $28.3 million, an increase of $775 thousand, or 3%, compared to the three months ended September 30, 2022. The increase was due primarily to increases in salary and employee benefits of $244 thousand, occupancy and equipment expenses of $230 thousand and deposit insurance premiums of $263 thousand.
Income Taxes
The effective tax rate was 25.0% and 24.1% for the three months ended September 30, 2023 and 2022, respectively. The difference resulted primarily from an increase in state taxes including a transfer of funds from the Bank's investment subsidiary corporations.
Balance Sheet
Total assets amounted to $4.48 billion at September 30, 2023, compared to $4.44 billion at December 31, 2022, an increase of $44.0 million, or 1%.
Total interest-earning deposits with banks, which consist of overnight and short-term investments, amounted to $180.1 million at September 30, 2023, compared to $230.7 million at December 31, 2022. The decrease of $50.6 million, or 22%, was related primarily to funding loan growth.
Total investment securities at fair value amounted to $678.9 million at September 30, 2023, compared to $820.4 million at December 31, 2022. The decrease of $141.4 million, or 17%, was attributable principally to sales of debt securities of $84.8 million and principal pay-downs, calls and maturities of $46.3 million. At September 30, 2023, unrealized losses on debt securities amounted to $133.2 million and Management determined that no ACL for available-for-sale securities was necessary.
Total loans amounted to $3.40 billion at September 30, 2023, compared to $3.18 billion at December 31, 2022. The increase of $223.5 million, or 7%, was primarily in commercial real estate of $111.0 million, or 6%, and commercial construction of $77.1 million, or 18%.
Total deposits amounted to $4.06 billion at September 30, 2023, compared to $4.04 billion at December 31, 2022, an increase of $24.6 million, or 1%. The Company has experienced a shift in deposit mix at September 30, 2023, compared to December 31, 2022, resulting from customers moving funds out of lower yielding checking and savings products (which together, have decreased 9%) into higher yielding money market and certificate of deposit products (which together, have increased 15%).
Shareholders' Equity
Total shareholders' equity amounted to $299.7 million at September 30, 2023, compared to $282.3 million at December 31, 2022. The increase of $17.4 million, or 6%, was due primarily to an increase in retained earnings, partially offset by an increase in the accumulated other comprehensive loss.
Credit Quality
Selected credit quality metrics at September 30, 2023, compared to December 31, 2022, are as follows:
- The ACL for loans amounted to $57.9 million, or 1.70% of total loans, compared to $52.6 million, or 1.66% of total loans.
- The reserve for unfunded commitments (included in other liabilities) amounted to $5.7 million compared to $4.3 million.
- Non-performing loans amounted to $11.7 million, or 0.34% of total loans, compared to $6.1 million, or 0.19% of total loans. The increase resulted primarily from one commercial relationship which also accounted for the increase in reserves for individually evaluated loans noted above.
Wealth Management
Wealth assets are not carried as assets on the Company's consolidated balance sheets.
Wealth assets under management amounted to $984.6 million at September 30, 2023. The increase of $93.2 million, or 10%, compared to December 31, 2022 resulted primarily from an increase in market values, and to a lesser extent, net asset growth attracted through new and expanded client relationships.
Wealth assets under administration amounted to $211.0 million at September 30, 2023 an increase of $12.5 million, or 6%, compared to December 31, 2022.
Supplemental Information
All balances and ratios presented in this section are at September 30, 2023 unless otherwise indicated.
Liquidity & Funding Capacity
- Overnight and short-term investments amounted to $180.1 million.
- FHLB and Federal Reserve Bank of Boston secured borrowing capacity amounted to $1.2 billion.
- The Company has several brokered deposit relationships (unsecured borrowings) which management estimated could provide an additional $800.0 million in funding capacity.
Deposit Information
- Uninsured deposits amounted to 35% of total deposits.
- Deposit balances that utilize third party enhanced Federal Deposit Insurance Corporation ("FDIC") insured products amounted to $815.0 million.
- Additional capacity to utilize these enhanced FDIC insured products exceeds the Company's total deposits balance.
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 136 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 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; cyber incidents or other failures, disruptions or security breaches; 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) | September 30, 2023 | December 31, 2022 | ||||||
| Assets | ||||||||
| Cash and cash equivalents: | ||||||||
| Cash and due from banks | $ | 45,345 | $ | 36,901 | ||||
| Interest-earning deposits with banks | 180,076 | 230,688 | ||||||
| Total cash and cash equivalents | 225,421 | 267,589 | ||||||
| Investments: | ||||||||
| Debt securities at fair value (amortized cost of $806,077 and $940,227, respectively) | 672,894 | 816,102 | ||||||
| Equity securities at fair value | 6,038 | 4,269 | ||||||
| Total investment securities at fair value | 678,932 | 820,371 | ||||||
| Federal Home Loan Bank stock | 2,403 | 2,343 | ||||||
| Loans: | ||||||||
| Total loans | 3,404,014 | 3,180,518 | ||||||
| Allowance for credit losses | (57,905 | ) | (52,640 | ) | ||||
| Net loans | 3,346,109 | 3,127,878 | ||||||
| Premises and equipment, net | 43,391 | 44,228 | ||||||
| Lease right-of-use asset | 24,979 | 24,923 | ||||||
| Accrued interest receivable | 18,572 | 17,117 | ||||||
| Deferred income taxes, net | 55,080 | 51,981 | ||||||
| Bank-owned life insurance | 65,106 | 64,156 | ||||||
| Prepaid income taxes | 2,548 | 683 | ||||||
| Prepaid expenses and other assets | 14,177 | 11,408 | ||||||
| Goodwill | 5,656 | 5,656 | ||||||
| Total assets | $ | 4,482,374 | $ | 4,438,333 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits | $ | 4,060,403 | $ | 4,035,806 | ||||
| Borrowed funds | 4,290 | 3,216 | ||||||
| Subordinated debt | 59,419 | 59,182 | ||||||
| Lease liability | 24,589 | 24,415 | ||||||
| Accrued expenses and other liabilities | 31,288 | 31,442 | ||||||
| Accrued interest payable | 2,686 | 2,005 | ||||||
| Total liabilities | 4,182,675 | 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; 12,256,964 and 12,133,516 shares issued and outstanding, respectively | 123 | 121 | ||||||
| Additional paid-in capital | 106,451 | 103,793 | ||||||
| Retained earnings | 296,291 | 274,560 | ||||||
| Accumulated other comprehensive loss | (103,166 | ) | (96,207 | ) | ||||
| Total shareholders' equity | 299,699 | 282,267 | ||||||
| Total liabilities and shareholders' equity | $ | 4,482,374 | $ | 4,438,333 | ||||
| ENTERPRISE BANCORP, INC. Consolidated Statements of Income (unaudited) | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Dollars in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Loans and loans held for sale | $ | 44,501 | $ | 35,306 | $ | 125,855 | $ | 98,149 | ||||||||
| Investment securities | 4,316 | 4,728 | 14,356 | 14,097 | ||||||||||||
| Other interest-earning assets | 3,468 | 2,068 | 7,593 | 2,642 | ||||||||||||
| Total interest and dividend income | 52,285 | 42,102 | 147,804 | 114,888 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 12,889 | 1,460 | 28,568 | 2,731 | ||||||||||||
| Borrowed funds | 28 | 13 | 70 | 39 | ||||||||||||
| Subordinated debt | 866 | 850 | 2,600 | 2,485 | ||||||||||||
| Total interest expense | 13,783 | 2,323 | 31,238 | 5,255 | ||||||||||||
| Net interest income | 38,502 | 39,779 | 116,566 | 109,633 | ||||||||||||
| Provision for credit losses | 1,752 | 1,000 | 6,756 | 3,939 | ||||||||||||
| Net interest income after provision for credit losses | 36,750 | 38,779 | 109,810 | 105,694 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Wealth management fees | 1,673 | 1,626 | 4,933 | 4,965 | ||||||||||||
| Deposit and interchange fees | 1,987 | 2,045 | 6,330 | 5,847 | ||||||||||||
| Income on bank-owned life insurance, net | 327 | 303 | 950 | 893 | ||||||||||||
| Net (losses) gains on sales of debt securities | — | — | (2,419 | ) | 1,062 | |||||||||||
| Net gains on sales of loans | 14 | 8 | 34 | 30 | ||||||||||||
| Losses on equity securities | (181 | ) | (193 | ) | (8 | ) | (688 | ) | ||||||||
| Other income | 666 | 736 | 2,242 | 2,143 | ||||||||||||
| Total non-interest income | 4,486 | 4,525 | 12,062 | 14,252 | ||||||||||||
| Non-interest expense: | ||||||||||||||||
| Salaries and employee benefits | 19,159 | 18,915 | 53,815 | 53,450 | ||||||||||||
| Occupancy and equipment expenses | 2,433 | 2,203 | 7,439 | 6,982 | ||||||||||||
| Technology and telecommunications expenses | 2,626 | 2,599 | 7,937 | 8,154 | ||||||||||||
| Advertising and public relations expenses | 592 | 510 | 2,077 | 1,737 | ||||||||||||
| Audit, legal and other professional fees | 735 | 693 | 2,157 | 2,078 | ||||||||||||
| Deposit insurance premiums | 654 | 391 | 1,944 | 1,313 | ||||||||||||
| Supplies and postage expenses | 251 | 219 | 753 | 663 | ||||||||||||
| Other operating expenses | 1,862 | 2,007 | 5,853 | 5,770 | ||||||||||||
| Total non-interest expense | 28,312 | 27,537 | 81,975 | 80,147 | ||||||||||||
| Income before income taxes | 12,924 | 15,767 | 39,897 | 39,799 | ||||||||||||
| Provision for income taxes | 3,225 | 3,805 | 9,746 | 9,389 | ||||||||||||
| Net income | $ | 9,699 | $ | 11,962 | $ | 30,151 | $ | 30,410 | ||||||||
| Basic earnings per common share | $ | 0.79 | $ | 0.99 | $ | 2.47 | $ | 2.51 | ||||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.98 | $ | 2.46 | $ | 2.50 | ||||||||
| Basic weighted average common shares outstanding | 12,247,892 | 12,119,348 | 12,210,740 | 12,094,613 | ||||||||||||
| Diluted weighted average common shares outstanding | 12,264,778 | 12,156,695 | 12,233,861 | 12,143,468 | ||||||||||||
| ENTERPRISE BANCORP, INC. Selected Consolidated Financial Data and Ratios (unaudited) | ||||||||||||||||||||
| At or for the three months ended | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Total cash and cash equivalents | $ | 225,421 | $ | 258,825 | $ | 215,693 | $ | 267,589 | $ | 413,688 | ||||||||||
| Total investment securities at fair value | 678,932 | 712,851 | 830,895 | 820,371 | 831,030 | |||||||||||||||
| Total loans | 3,404,014 | 3,345,667 | 3,230,156 | 3,180,518 | 3,109,369 | |||||||||||||||
| Allowance for credit losses | (57,905 | ) | (56,899 | ) | (55,002 | ) | (52,640 | ) | (51,211 | ) | ||||||||||
| Total assets | 4,482,374 | 4,502,344 | 4,441,896 | 4,438,333 | 4,529,820 | |||||||||||||||
| Total deposits | 4,060,403 | 4,075,598 | 4,016,156 | 4,035,806 | 4,138,038 | |||||||||||||||
| Subordinated debt | 59,419 | 59,340 | 59,261 | 59,182 | 59,102 | |||||||||||||||
| Total shareholders' equity | 299,699 | 307,490 | 311,318 | 282,267 | 272,193 | |||||||||||||||
| Total liabilities and shareholders' equity | 4,482,374 | 4,502,344 | 4,441,896 | 4,438,333 | 4,529,820 | |||||||||||||||
| Wealth Management | ||||||||||||||||||||
| Wealth assets under management | $ | 984,647 | $ | 1,009,386 | $ | 930,714 | $ | 891,451 | $ | 835,661 | ||||||||||
| Wealth assets under administration | $ | 211,046 | $ | 214,116 | $ | 206,569 | $ | 198,586 | $ | 185,977 | ||||||||||
| Shareholders' Equity Ratios | ||||||||||||||||||||
| Book value per common share | $ | 24.45 | $ | 25.11 | $ | 25.47 | $ | 23.26 | $ | 22.44 | ||||||||||
| Dividends paid per common share | $ | 0.230 | $ | 0.230 | $ | 0.230 | $ | 0.205 | $ | 0.205 | ||||||||||
| Regulatory Capital Ratios | ||||||||||||||||||||
| Total capital to risk weighted assets | 13.41 | % | 13.37 | % | 13.55 | % | 13.49 | % | 13.49 | % | ||||||||||
| Tier 1 capital to risk weighted assets(1) | 10.58 | % | 10.52 | % | 10.64 | % | 10.56 | % | 10.52 | % | ||||||||||
| Tier 1 capital to average assets | 8.59 | % | 8.62 | % | 8.47 | % | 8.10 | % | 7.89 | % | ||||||||||
| Credit Quality Data | ||||||||||||||||||||
| Non-performing loans | $ | 11,656 | $ | 7,647 | $ | 7,532 | $ | 6,122 | $ | 5,717 | ||||||||||
| Non-performing loans to total loans | 0.34 | % | 0.23 | % | 0.23 | % | 0.19 | % | 0.18 | % | ||||||||||
| Non-performing assets to total assets | 0.26 | % | 0.17 | % | 0.17 | % | 0.14 | % | 0.13 | % | ||||||||||
| ACL for loans to total loans | 1.70 | % | 1.70 | % | 1.70 | % | 1.66 | % | 1.65 | % | ||||||||||
| Net charge-offs (recoveries) | $ | (12 | ) | $ | 146 | $ | (44 | ) | $ | 166 | $ | 52 | ||||||||
| Income Statement Data | ||||||||||||||||||||
| Net interest income | $ | 38,502 | $ | 38,093 | $ | 39,971 | $ | 42,165 | $ | 39,779 | ||||||||||
| Provision for credit losses | 1,752 | 2,268 | 2,736 | 1,861 | 1,000 | |||||||||||||||
| Total non-interest income | 4,486 | 2,819 | 4,757 | 4,210 | 4,525 | |||||||||||||||
| Total non-interest expense | 28,312 | 25,623 | 28,040 | 28,167 | 27,537 | |||||||||||||||
| Income before income taxes | 12,924 | 13,021 | 13,952 | 16,347 | 15,767 | |||||||||||||||
| Provision for income taxes | 3,225 | 3,337 | 3,184 | 4,041 | 3,805 | |||||||||||||||
| Net income | $ | 9,699 | $ | 9,684 | $ | 10,768 | $ | 12,306 | $ | 11,962 | ||||||||||
| Income Statement Ratios | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.79 | $ | 0.88 | $ | 1.01 | $ | 0.98 | ||||||||||
| Return on average total assets | 0.85 | % | 0.88 | % | 0.99 | % | 1.08 | % | 1.05 | % | ||||||||||
| Return on average shareholders' equity | 12.53 | % | 12.63 | % | 14.67 | % | 18.08 | % | 16.47 | % | ||||||||||
| Net interest margin (tax-equivalent)(2) | 3.46 | % | 3.55 | % | 3.76 | % | 3.81 | % | 3.61 | % | ||||||||||
| (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) | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||
| Commercial real estate | $ | 2,032,458 | $ | 2,009,263 | $ | 1,929,544 | $ | 1,921,410 | $ | 1,886,365 | ||||||||||
| Commercial and industrial | 425,334 | 420,095 | 423,864 | 414,490 | 413,347 | |||||||||||||||
| Commercial construction | 501,179 | 487,018 | 456,735 | 424,049 | 396,027 | |||||||||||||||
| SBA PPP | — | — | — | — | 2,725 | |||||||||||||||
| Total commercial loans | 2,958,971 | 2,916,376 | 2,810,143 | 2,759,949 | 2,698,464 | |||||||||||||||
| Residential mortgages | 362,514 | 346,523 | 335,834 | 332,632 | 321,663 | |||||||||||||||
| Home equity loans and lines | 74,433 | 74,374 | 75,809 | 79,807 | 80,882 | |||||||||||||||
| Consumer | 8,096 | 8,394 | 8,370 | 8,130 | 8,360 | |||||||||||||||
| Total retail loans | 445,043 | 429,291 | 420,013 | 420,569 | 410,905 | |||||||||||||||
| Total loans | 3,404,014 | 3,345,667 | 3,230,156 | 3,180,518 | 3,109,369 | |||||||||||||||
| ACL for loans | (57,905 | ) | (56,899 | ) | (55,002 | ) | (52,640 | ) | (51,211 | ) | ||||||||||
| Net loans | $ | 3,346,109 | $ | 3,288,768 | $ | 3,175,154 | $ | 3,127,878 | $ | 3,058,158 | ||||||||||
Deposits are summarized as follows as of the periods indicated:
| (Dollars in thousands) | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||
| Non-interest checking | $ | 1,130,732 | $ | 1,273,968 | $ | 1,247,253 | $ | 1,361,588 | $ | 1,441,104 | |||||
| Interest-bearing checking | 727,817 | 701,701 | 641,194 | 678,715 | 719,474 | ||||||||||
| Savings | 290,363 | 310,321 | 297,790 | 326,666 | 351,665 | ||||||||||
| Money market | 1,434,036 | 1,373,816 | 1,454,858 | 1,381,645 | 1,395,756 | ||||||||||
| CDs $250,000 or less | 262,975 | 244,114 | 222,116 | 187,758 | 163,520 | ||||||||||
| CDs greater than $250,000 | 214,480 | 171,678 | 152,945 | 99,434 | 66,519 | ||||||||||
| Deposits | $ | 4,060,403 | $ | 4,075,598 | $ | 4,016,156 | $ | 4,035,806 | $ | 4,138,038 | |||||
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:
| (Dollars in thousands) | Three months ended September 30, 2023 | Three months ended June 30, 2023 | Three months ended September 30, 2022 | ||||||||||||||||||||||||
| 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) | $ | 3,372,754 | $ | 44,644 | 5.25 | % | $ | 3,268,586 | $ | 41,930 | 5.14 | % | $ | 3,085,896 | $ | 35,422 | 4.56 | % | |||||||||
| Investment securities(3) (tax-equivalent) | 820,156 | 4,444 | 2.17 | % | 917,965 | 5,189 | 2.26 | % | 954,385 | 4,959 | 2.08 | % | |||||||||||||||
| Other interest-earning assets(4) | 260,475 | 3,468 | 5.28 | % | 155,934 | 1,917 | 4.93 | % | 375,213 | 2,068 | 2.19 | % | |||||||||||||||
| Total interest-earnings assets (tax-equivalent) | 4,453,385 | 52,556 | 4.69 | % | 4,342,485 | 49,036 | 4.53 | % | 4,415,494 | 42,449 | 3.82 | % | |||||||||||||||
| Other assets | 82,190 | 92,909 | 101,095 | ||||||||||||||||||||||||
| Total assets | $ | 4,535,575 | $ | 4,435,394 | $ | 4,516,589 | |||||||||||||||||||||
| Liabilities and stockholders' equity: | |||||||||||||||||||||||||||
| Interest checking, savings and money market | $ | 2,481,814 | 9,185 | 1.47 | % | $ | 2,351,011 | 6,880 | 1.17 | % | $ | 2,444,705 | 1,045 | 0.17 | % | ||||||||||||
| CDs | 430,376 | 3,704 | 3.41 | % | 393,387 | 2,812 | 2.87 | % | 221,827 | 415 | 0.74 | % | |||||||||||||||
| Borrowed funds | 4,938 | 28 | 2.30 | % | 4,595 | 30 | 2.58 | % | 2,940 | 13 | 1.77 | % | |||||||||||||||
| Subordinated debt(5) | 59,372 | 866 | 5.84 | % | 59,293 | 867 | 5.85 | % | 59,052 | 850 | 5.76 | % | |||||||||||||||
| Total interest-bearing funding | 2,976,500 | 13,783 | 1.84 | % | 2,808,286 | 10,589 | 1.51 | % | 2,728,524 | 2,323 | 0.34 | % | |||||||||||||||
| Non-interest checking | 1,195,658 | — | 1,269,339 | — | 1,449,909 | — | |||||||||||||||||||||
| Total deposits, borrowed funds and subordinated debt | 4,172,158 | 13,783 | 1.31 | % | 4,077,625 | 10,589 | 1.04 | % | 4,178,433 | 2,323 | 0.22 | % | |||||||||||||||
| Other liabilities | 56,414 | 50,113 | 50,034 | ||||||||||||||||||||||||
| Total liabilities | 4,228,572 | 4,127,738 | 4,228,467 | ||||||||||||||||||||||||
| Stockholders' equity | 307,003 | 307,656 | 288,122 | ||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,535,575 | $ | 4,435,394 | $ | 4,516,589 | |||||||||||||||||||||
| Net interest-rate spread (tax-equivalent) | 2.85 | % | 3.02 | % | 3.48 | % | |||||||||||||||||||||
| Net interest income (tax-equivalent) | 38,773 | 38,447 | 40,126 | ||||||||||||||||||||||||
| Net interest margin (tax-equivalent) | 3.46 | % | 3.55 | % | 3.61 | % | |||||||||||||||||||||
| Less tax-equivalent adjustment | 271 | 354 | 347 | ||||||||||||||||||||||||
| Net interest income | $ | 38,502 | $ | 38,093 | $ | 39,779 | |||||||||||||||||||||
| Net interest margin | 3.43 | % | 3.52 | % | 3.58 | % | |||||||||||||||||||||
| (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 are presented at amortized cost and include non-accrual loans. |
| (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
