2019 Financial Results Announced

LOWELL, Mass., January 23, 2020 (GLOBE NEWSWIRE) - Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the year ended December 31, 2019 of $34.2 million, or $2.89 per diluted share, compared to $28.9 million, or $2.46 per diluted share, for the year ended December 31, 2018.  Net income for the three months ended December 31, 2019 amounted to $8.7 million, or $0.74 per diluted share, compared to $6.5 million, or $0.55 per diluted share, for the same three-month period in 2018.

As previously announced on January 21, 2020, the Company declared a quarterly dividend of $0.175 per share to be paid on March 2, 2020 to shareholders of record as of February 10, 2020.  The dividend rate for the first quarter of 2020 represents a 9.4% increase over the dividend rate for the same period in 2019.

Chief Executive Officer Jack Clancy commented, "The increase in our 2019 earnings compared to 2018 is largely attributable to solid loan and customer deposit growth and the continuation of positive credit metrics.  For 2019, total assets, total loans and total customer deposits increased 9%, 7% and 11%, respectively, compared to December 31, 2018."

Mr. Clancy continued, "We operate with a long-term mindset that is focused on growing organically and supporting growth by continually investing in our people, products, services, technology, digital transformation, and both new and existing branches.  We are especially excited to be opening our Lexington, MA branch this February and this coming summer our 26th branch will open in North Andover, MA."

On November 14, 2019, the Company was named #1 on the Boston Globe's Top Places to Work list among large-sized companies in Massachusetts.  Founder and Chairman of the Board George Duncan commented, "This is our eighth consecutive year on the list, and we are very proud to be ranked #1 in 2019.  I want to personally thank and commend our entire dedicated team for their continual efforts to foster an employee-centric culture whose foundation is based on respect, trust, caring, personal accountability and excellence.  We believe these values and behaviors lead to positive morale, lower turnover and recruiting advantages and ultimately translate to memorable customer experiences, active community involvement, strong growth and strong shareholder returns."

Results of Operations

Net interest income for the year ended December 31, 2019 amounted to $115.9 million, an increase of $7.0 million, or 6%, compared to the year ended December 31, 2018.  Net interest income for the three months ended December 31, 2019 amounted to $29.6 million, an increase of $1.4 million, or 5%, compared to the same three-month period in 2018.  The increase in net interest income was due largely to interest-earning asset growth, primarily in loans.  Average loan balances increased $128.4 million, or 6%, for the year ended December 31, 2019, and $181.8 million, or 8%, for the three months ended December 31, 2019 compared to the same respective 2018 period averages.

Tax equivalent net interest margin ("Margin") was 3.95% for the year ended December 31, 2019, compared to 3.97% for the year ended December 31, 2018.  The decrease resulted from the cost of funds increasing more than interest earning asset yields.  Margin was 3.93% for the three months ended December 31, 2019, compared to 4.03% for the three months ended December 31, 2018.  The decrease resulted from a decrease in interest earning yields and an increase in the cost of funds.

The allowance for loan losses to total loans ratio was 1.31% at December 31, 2019, compared to 1.42% at December 31, 2018.  For the year ended December 31, 2019, the provision for loan losses was $1.2 million, compared to $2.3 million for the year ended December 31, 2018.  For both of the three-month periods ended December 31, 2019 and 2018, the provision for loan losses was a credit of $400 thousand.

The decrease in the provision for loan losses for 2019 compared to the prior year was due primarily to generally positive credit metrics, partially offset by the impact of loan growth in 2019.  Affecting the provision for loan losses for the year ended December 31, 2019 compared to the prior year were:

  • The ratio of impaired and classified loans to total loans amounted to 2.25% at December 31, 2019, compared to 2.41% at December 31, 2018.
  • The provision for loan loss related to impaired and classified loans was lower in 2019 than in 2018, contributing to a decrease in the overall provision.
  • Loan growth for the year ended December 31, 2019 was $178.0 million, compared to $117.6 million during the year ended December 31, 2018.
  • The allowance allocated to non-classified loans was relatively flat for the year ended December 31, 2019 compared to 2018, as provisions necessary for loan growth were largely offset by continued positive credit and economic metrics.

Non-interest income for the year ended December 31, 2019 amounted to $16.3 million, an increase of $4.3 million, or 36%, compared to the year ended December 31, 2018.  Non-interest income for the three months ended December 31, 2019 amounted to $4.3 million, an increase of $3.6 million compared to the three months ended December 31, 2018.  Non-interest income increased in both the three month and year ended December 31, 2019 periods compared to the same prior year periods, due primarily to $2.9 million in realized losses on a discretionary partial restructure of the bond portfolio in 2018.  Other changes included increases in deposit and interchange fees in the 2019 periods, as well as net gains on equity securities, which are included in other income, compared with net losses on equity securities in the comparable 2018 periods, due primarily to fair value adjustments.

For the year ended December 31, 2019, non-interest expense amounted to $86.4 million, an increase of $5.5 million, or 7%, compared to the year ended December 31, 2018.  Non-interest expense for the three months ended December 31, 2019 amounted to $22.7 million, an increase of $2.1 million, or 10%, compared to the three months ended December 31, 2018.  Increases in non-interest expense in the three month and year ended December 31, 2019 periods primarily related to the Company's strategic growth initiatives, particularly salaries and employee benefits and technology and telecommunications expenses.  Technology initiatives include the Company's multi-year digital transformation strategy to enhance operating efficiency and the customer experience.  Partially offsetting these expenses, were reductions in deposit insurance premiums primarily resulting from a Small Bank Assessment Credit from the FDIC Deposit Insurance Fund of $307 thousand for the three months ended December 31, 2019 and $683 thousand for the year ended December 31, 2019.

Key Financial Highlights

  • Total assets amounted to $3.24 billion at December 31, 2019, compared to $2.96 billion at December 31, 2018, an increase of $270.7 million, or 9%.  Since September 30, 2019, total assets increased $96.3 million, or 3%.
  • Total loans amounted to $2.57 billion at December 31, 2019, compared to $2.39 billion at December 31, 2018, an increase of $178.0 million, or 7%.  Since September 30, 2019, total loans increased $93.3 million, or 4%.
  • Customer deposits were $2.79 billion at December 31, 2019, compared to $2.51 billion at December 31, 2018, an increase of $278.7 million, or 11%.  Customer deposits at December 31, 2019 remained consistent with balances at September 30, 2019.
  • Investment assets under management amounted to $916.6 million at December 31, 2019, compared to $800.8 million at December 31, 2018, an increase of $115.9 million, or 14%.  Since September 30, 2019, investment assets under management increased $41.6 million, or 5%.
  • Total assets under management amounted to $4.25 billion at December 31, 2019, compared to $3.85 billion at December 31, 2018, an increase of $393.2 million, or 10%.  Since September 30, 2019, total assets under management increased $140.1 million, or 3%.

Enterprise Bancorp, Inc. is a Massachusetts corporation that conducts substantially all of its operations through Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank, and has reported 121 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, digital banking options, and insurance services.  Enterprise Bank also provides a range of wealth management, wealth services and trust services delivered via two channels, Enterprise Wealth Management and Enterprise Wealth 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 Greater Merrimack Valley, Nashoba Valley, and North Central regions of Massachusetts and Southern New Hampshire (Southern Hillsborough and Rockingham counties).  Enterprise Bank has 24 full-service branches located in the Massachusetts communities of Lowell (2), Acton, Andover, Billerica (2), Chelmsford (2), Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury (2), Tyngsborough and Westford and in the New Hampshire communities of Derry, Hudson, Nashua (2), Pelham, Salem and Windham.  The Company is also in the process of establishing branch offices in the Massachusetts communities of Lexington and North Andover and anticipates that these offices will open in February 2020 and summer 2020, respectively.

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,” “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, changes in interest rates, 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, and changes in tax laws.  Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. For more information about these factors, please see our reports filed with or furnished to the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K 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.

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