Enterprise Bancorp, Inc. Announces Fourth Quarter Financial Results
- None.
- None.
Insights
The reported decrease in net income for Enterprise Bancorp, Inc. during the fourth quarter and the full year of 2023 is a critical metric for investors. The year-over-year decline from $12.3 million to $7.9 million for the quarter and from $42.7 million to $38.1 million for the full year, indicates a contraction in profitability. This contraction could be reflective of the broader economic challenges faced by the banking industry, including higher interest rates and an inverted yield curve. Such factors often lead to margin compression as the cost of deposits increases, outpacing the interest income generated from loans.
It is also noteworthy that the bank's loan portfolio grew by 12% year-over-year, which suggests an aggressive lending strategy that could potentially offset some of the interest margin pressures. However, the decrease in total deposits towards the year-end is an area of concern, as it may indicate a reduction in customer deposits, which are a primary source of low-cost funding for banks.
Enterprise Bancorp's net interest margin of 3.29% is a key indicator of the bank's lending profitability. While this figure is robust, the reported decrease from the previous quarter, due to rising deposit costs, could signal tightening net interest income in future quarters, especially if the trend continues.
The growth in wealth assets under management and administration by 21% year-over-year to $1.3 billion is a positive signal for Enterprise Bancorp, Inc. This growth indicates the bank's capability to attract and manage client assets, which is particularly important in a challenging economic environment. Wealth management services can provide a stable source of fee-based income, which is less sensitive to interest rate fluctuations than traditional banking activities such as lending.
With the bank celebrating its 35th anniversary and highlighting its expansion to 27 full-service locations, it demonstrates a commitment to growth and community presence. This expansion strategy could help in diversifying the bank's revenue streams and strengthening its customer base. However, the effectiveness of these strategies should be continuously monitored to ensure that they contribute positively to the bank's financial performance.
The broader economic context in which Enterprise Bancorp operates is essential to understanding the bank's financial performance. The higher interest rates and an inverted yield curve mentioned by the CEO are macroeconomic factors that typically signal a cautious or negative economic outlook. An inverted yield curve, where short-term rates exceed long-term rates, is often considered a precursor to an economic slowdown or recession.
These conditions can adversely affect banks by narrowing the spread between what they earn on long-term loans and pay on short-term deposits. Enterprise Bancorp's ability to navigate these headwinds and maintain a stable net interest margin, albeit slightly decreased, is a testament to their risk management and strategic planning. Investors should consider these macroeconomic indicators when evaluating the bank's future performance, as continued economic challenges could impact the bank's profitability and growth prospects.
LOWELL, Mass., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced its financial results for the three months and year ended December 31, 2023. Net income amounted to
Selected financial results at or for the three months ended December 31, 2023, were as follows:
- The return on average assets and average equity were
0.69% and10.21% , respectively. - Tax-equivalent net interest margin (non-GAAP) ("net interest margin") was
3.29% . - Total loans increased
5% compared to September 30, 2023, and12% compared to December 31, 2022. - Total deposits decreased
2% compared to September 30, 2023, and1% compared to December 31, 2022. - Wealth assets under management and administration amounted to
$1.3 billion and increased10% compared to September 30, 2023, and21% compared to December 31, 2022.
Chief Executive Officer Jack Clancy commented, "On January 3, we celebrated the 35th anniversary of our opening. I am so appreciative to all our customers, shareholders, directors, and team members for your continued support through the years. Our numerous accomplishments include growing to
Mr. Clancy continued, "We performed well in a challenging year for the banking industry as higher interest rates and an inverted yield curve contributed to margin compression. Full year loan growth, excluding PPP loans, was
Executive Chairman & Founder George Duncan added, "We have navigated through many headwinds and tailwinds over our 35-year history and this past year was certainly a memorable one. I am grateful to all team members for the exceptional service provided to our customers during the year. We remain committed to continuous organic growth supported through investments in our communities, team members, technology and products and services. As a result of our approach, efforts, and the long-term opportunities, in and around our markets, I am very excited about our future."
Mr. Duncan also highlighted, "In November 2023, we were recognized for the twelfth consecutive year on the Boston Globe’s Top Places to Work list. Enterprise Bank ranked 9th for Large Companies and was the highest rated bank in our category. I want to personally thank and commend our entire dedicated team for their continual efforts in fostering an employee-centric culture whose foundation is based on respect, trust, care, personal accountability and excellence."
Net Interest Income
Net interest income for the three months ended December 31, 2023, amounted to
Net Interest Margin
Three months ended – December 31, 2023, compared to September 30, 2023
Net interest margin was
Net interest margin compared to the prior quarter was impacted by the following factors:
- Average interest-earning deposits with banks decreased
$88.3 million , or34% , while the yield increased 12 basis points. - Average loan balances increased
$95.2 million , or3% , and the tax-equivalent yield increased 11 basis points. - Average total deposits decreased
$25.2 million , or1% , while the yield increased 30 basis points.
Three months ended – December 31, 2023, compared to December 31, 2022
Net interest margin was
Net interest margin compared to the prior year quarter was impacted by the following factors:
- Average interest-earning deposits with banks decreased
$188.5 million , or53% , while the yield increased 168 basis points. - Average debt securities decreased
$155.9 million , or16% , while the tax-equivalent yield increased 5 basis points. - Average loan balances increased
$349.6 million , or11% , and the tax-equivalent yield increased 54 basis points. - Average total deposits decreased
$33.3 million , or1% , while the yield increased 125 basis points.
The decrease in net interest margin over the respective periods was due primarily to an increase in deposit costs that exceeded the increase in loan yields. Deposit costs increased due to higher market and competitor interest rates as well as a change in mix, as deposits migrated from lower yielding checking and savings products into higher yielding money market and certificate of deposit products compared to the respective periods. In addition, the Company experienced strong loan growth over the respective periods, funded primarily by interest-earning deposits with banks, investment cash flows including the sale of debt securities in June 2023, partially offset by deposit outflows.
Provision for Credit Losses
The provision for credit losses for the three months ended December 31, 2023, amounted to
Non-Interest Income
Non-interest income for the three months ended December 31, 2023, amounted to
Non-Interest Expense
Non-interest expense for the three months ended December 31, 2023, amounted to
Income Taxes
The effective tax rate was
Balance Sheet
Total assets amounted to
Total interest-earning deposits with banks, which consist of overnight and short-term investments, amounted to
Total investment securities at fair value amounted to
Total loans amounted to
Total deposits amounted to
Total shareholders' equity amounted to
Credit Quality
Selected credit quality metrics at December 31, 2023, compared to December 31, 2022, are as follows:
- The ACL for loans amounted to
$59.0 million , or1.65% of total loans, compared to$52.6 million , or1.66% of total loans. - The reserve for unfunded commitments (included in other liabilities) amounted to
$7.1 million , compared to$4.3 million . - Non-performing loans amounted to
$11.4 million , or0.32% of total loans, compared to$6.1 million , or0.19% of total loans. The increase resulted primarily from one individually evaluated commercial relationship downgraded in the third quarter of 2023, which was partially offset by principal pay-downs and credit upgrades.
Wealth Management
Wealth assets are not carried as assets on the Company's consolidated balance sheets.
Wealth assets under management amounted to
Wealth assets under administration amounted to
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 137 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 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; 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; 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) | December 31, 2023 | December 31, 2022 | ||||||
| Assets | ||||||||
| Cash and cash equivalents: | ||||||||
| Cash and due from banks | $ | 37,443 | $ | 36,901 | ||||
| Interest-earning deposits with banks | 19,149 | 230,688 | ||||||
| Total cash and cash equivalents | 56,592 | 267,589 | ||||||
| Investments: | ||||||||
| Debt securities at fair value (amortized cost of | 661,113 | 816,102 | ||||||
| Equity securities at fair value | 7,058 | 4,269 | ||||||
| Total investment securities at fair value | 668,171 | 820,371 | ||||||
| Federal Home Loan Bank stock | 2,402 | 2,343 | ||||||
| Loans held for sale | 200 | — | ||||||
| Loans: | ||||||||
| Total loans | 3,567,631 | 3,180,518 | ||||||
| Allowance for credit losses | (58,995 | ) | (52,640 | ) | ||||
| Net loans | 3,508,636 | 3,127,878 | ||||||
| Premises and equipment, net | 44,931 | 44,228 | ||||||
| Lease right-of-use asset | 24,820 | 24,923 | ||||||
| Accrued interest receivable | 19,233 | 17,117 | ||||||
| Deferred income taxes, net | 49,166 | 51,981 | ||||||
| Bank-owned life insurance | 65,455 | 64,156 | ||||||
| Prepaid income taxes | 1,589 | 683 | ||||||
| Prepaid expenses and other assets | 19,183 | 11,408 | ||||||
| Goodwill | 5,656 | 5,656 | ||||||
| Total assets | $ | 4,466,034 | $ | 4,438,333 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits | $ | 3,977,521 | $ | 4,035,806 | ||||
| Borrowed funds | 25,768 | 3,216 | ||||||
| Subordinated debt | 59,498 | 59,182 | ||||||
| Lease liability | 24,441 | 24,415 | ||||||
| Accrued expenses and other liabilities | 45,011 | 31,442 | ||||||
| Accrued interest payable | 4,678 | 2,005 | ||||||
| Total liabilities | 4,136,917 | 4,156,066 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 123 | 121 | ||||||
| Additional paid-in capital | 107,377 | 103,793 | ||||||
| Retained earnings | 301,380 | 274,560 | ||||||
| Accumulated other comprehensive loss | (79,763 | ) | (96,207 | ) | ||||
| Total shareholders' equity | 329,117 | 282,267 | ||||||
| Total liabilities and shareholders' equity | $ | 4,466,034 | $ | 4,438,333 | ||||
| ENTERPRISE BANCORP, INC. Consolidated Statements of Income (unaudited) | |||||||||||||||
| Three months ended | Year ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| (Dollars in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Interest and dividend income: | |||||||||||||||
| Loans and loans held for sale | $ | 46,680 | $ | 37,785 | $ | 172,535 | $ | 135,934 | |||||||
| Investment securities | 4,219 | 4,868 | 18,575 | 18,965 | |||||||||||
| Other interest-earning assets | 2,350 | 3,372 | 9,943 | 6,014 | |||||||||||
| Total interest and dividend income | 53,249 | 46,025 | 201,053 | 160,913 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 15,821 | 2,980 | 44,389 | 5,711 | |||||||||||
| Borrowed funds | 43 | 13 | 113 | 52 | |||||||||||
| Subordinated debt | 867 | 867 | 3,467 | 3,352 | |||||||||||
| Total interest expense | 16,731 | 3,860 | 47,969 | 9,115 | |||||||||||
| Net interest income | 36,518 | 42,165 | 153,084 | 151,798 | |||||||||||
| Provision for credit losses | 2,493 | 1,861 | 9,249 | 5,800 | |||||||||||
| Net interest income after provision for credit losses | 34,025 | 40,304 | 143,835 | 145,998 | |||||||||||
| Non-interest income: | |||||||||||||||
| Wealth management fees | 1,797 | 1,568 | 6,730 | 6,533 | |||||||||||
| Deposit and interchange fees | 2,145 | 2,349 | 8,475 | 8,196 | |||||||||||
| Income on bank-owned life insurance, net | 314 | 309 | 1,264 | 1,202 | |||||||||||
| Net losses on sales of debt securities | — | (3,035 | ) | (2,419 | ) | (1,973 | ) | ||||||||
| Net gains on sales of loans | — | — | 34 | 30 | |||||||||||
| Net gain on sale of insurance commissions | — | 2,034 | — | 2,034 | |||||||||||
| Gains (losses) on equity securities | 674 | 174 | 666 | (514 | ) | ||||||||||
| Other income | 617 | 811 | 2,859 | 2,954 | |||||||||||
| Total non-interest income | 5,547 | 4,210 | 17,609 | 18,462 | |||||||||||
| Non-interest expense: | |||||||||||||||
| Salaries and employee benefits | 18,468 | 18,670 | 72,283 | 72,120 | |||||||||||
| Occupancy and equipment expenses | 2,283 | 2,317 | 9,722 | 9,299 | |||||||||||
| Technology and telecommunications expenses | 2,719 | 2,581 | 10,656 | 10,735 | |||||||||||
| Advertising and public relations expenses | 709 | 1,021 | 2,786 | 2,758 | |||||||||||
| Audit, legal and other professional fees | 788 | 871 | 2,945 | 2,949 | |||||||||||
| Deposit insurance premiums | 768 | 470 | 2,712 | 1,783 | |||||||||||
| Supplies and postage expenses | 245 | 249 | 998 | 912 | |||||||||||
| Other operating expenses | 2,244 | 1,988 | 8,097 | 7,758 | |||||||||||
| Total non-interest expense | 28,224 | 28,167 | 110,199 | 108,314 | |||||||||||
| Income before income taxes | 11,348 | 16,347 | 51,245 | 56,146 | |||||||||||
| Provision for income taxes | 3,441 | 4,041 | 13,187 | 13,430 | |||||||||||
| Net income | $ | 7,907 | $ | 12,306 | $ | 38,058 | $ | 42,716 | |||||||
| Basic earnings per common share | $ | 0.64 | $ | 1.01 | $ | 3.11 | $ | 3.53 | |||||||
| Diluted earnings per common share | $ | 0.64 | $ | 1.01 | $ | 3.11 | $ | 3.52 | |||||||
| Basic weighted average common shares outstanding | 12,261,918 | 12,128,019 | 12,223,626 | 12,103,033 | |||||||||||
| Diluted weighted average common shares outstanding | 12,276,769 | 12,168,753 | 12,244,036 | 12,149,777 | |||||||||||
| ENTERPRISE BANCORP, INC. Selected Consolidated Financial Data and Ratios (unaudited) | ||||||||||||||||||||
| At or for the three months ended | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Total cash and cash equivalents | $ | 56,592 | $ | 225,421 | $ | 258,825 | $ | 215,693 | $ | 267,589 | ||||||||||
| Total investment securities at fair value | 668,171 | 678,932 | 712,851 | 830,895 | 820,371 | |||||||||||||||
| Total loans | 3,567,631 | 3,404,014 | 3,345,667 | 3,230,156 | 3,180,518 | |||||||||||||||
| Allowance for credit losses | (58,995 | ) | (57,905 | ) | (56,899 | ) | (55,002 | ) | (52,640 | ) | ||||||||||
| Total assets | 4,466,034 | 4,482,374 | 4,502,344 | 4,441,896 | 4,438,333 | |||||||||||||||
| Total deposits | 3,977,521 | 4,060,403 | 4,075,598 | 4,016,156 | 4,035,806 | |||||||||||||||
| Subordinated debt | 59,498 | 59,419 | 59,340 | 59,261 | 59,182 | |||||||||||||||
| Total shareholders' equity | 329,117 | 299,699 | 307,490 | 311,318 | 282,267 | |||||||||||||||
| Total liabilities and shareholders' equity | 4,466,034 | 4,482,374 | 4,502,344 | 4,441,896 | 4,438,333 | |||||||||||||||
| Wealth Management | ||||||||||||||||||||
| Wealth assets under management | $ | 1,077,761 | $ | 984,647 | $ | 1,009,386 | $ | 930,714 | $ | 891,451 | ||||||||||
| Wealth assets under administration | $ | 242,338 | $ | 211,046 | $ | 214,116 | $ | 206,569 | $ | 198,586 | ||||||||||
| Shareholders' Equity Ratios | ||||||||||||||||||||
| Book value per common share | $ | 26.82 | $ | 24.45 | $ | 25.11 | $ | 25.47 | $ | 23.26 | ||||||||||
| Dividends paid per common share | $ | 0.230 | $ | 0.230 | $ | 0.230 | $ | 0.230 | $ | 0.205 | ||||||||||
| Regulatory Capital Ratios | ||||||||||||||||||||
| Total capital to risk weighted assets | 13.12 | % | 13.45 | % | 13.37 | % | 13.55 | % | 13.49 | % | ||||||||||
| Tier 1 capital to risk weighted assets(1) | 10.34 | % | 10.61 | % | 10.52 | % | 10.64 | % | 10.56 | % | ||||||||||
| Tier 1 capital to average assets | 8.74 | % | 8.59 | % | 8.62 | % | 8.47 | % | 8.10 | % | ||||||||||
| Credit Quality Data | ||||||||||||||||||||
| Non-performing loans | $ | 11,414 | $ | 11,656 | $ | 7,647 | $ | 7,532 | $ | 6,122 | ||||||||||
| Non-performing loans to total loans | 0.32 | % | 0.34 | % | 0.23 | % | 0.23 | % | 0.19 | % | ||||||||||
| Non-performing assets to total assets | 0.26 | % | 0.26 | % | 0.17 | % | 0.17 | % | 0.14 | % | ||||||||||
| ACL for loans to total loans | 1.65 | % | 1.70 | % | 1.70 | % | 1.70 | % | 1.66 | % | ||||||||||
| Net charge-offs (recoveries) | $ | 15 | $ | (12 | ) | $ | 146 | $ | (44 | ) | $ | 166 | ||||||||
| Income Statement Data | ||||||||||||||||||||
| Net interest income | $ | 36,518 | $ | 38,502 | $ | 38,093 | $ | 39,971 | $ | 42,165 | ||||||||||
| Provision for credit losses | 2,493 | 1,752 | 2,268 | 2,736 | 1,861 | |||||||||||||||
| Total non-interest income | 5,547 | 4,486 | 2,819 | 4,757 | 4,210 | |||||||||||||||
| Total non-interest expense | 28,224 | 28,312 | 25,623 | 28,040 | 28,167 | |||||||||||||||
| Income before income taxes | 11,348 | 12,924 | 13,021 | 13,952 | 16,347 | |||||||||||||||
| Provision for income taxes | 3,441 | 3,225 | 3,337 | 3,184 | 4,041 | |||||||||||||||
| Net income | $ | 7,907 | $ | 9,699 | $ | 9,684 | $ | 10,768 | $ | 12,306 | ||||||||||
| Income Statement Ratios | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.64 | $ | 0.79 | $ | 0.79 | $ | 0.88 | $ | 1.01 | ||||||||||
| Return on average total assets | 0.69 | % | 0.85 | % | 0.88 | % | 0.99 | % | 1.08 | % | ||||||||||
| Return on average shareholders' equity | 10.21 | % | 12.53 | % | 12.63 | % | 14.67 | % | 18.08 | % | ||||||||||
| Net interest margin (tax-equivalent)(2) | 3.29 | % | 3.46 | % | 3.55 | % | 3.76 | % | 3.81 | % | ||||||||||
(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) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Commercial real estate | $ | 2,064,737 | $ | 2,032,458 | $ | 2,009,263 | $ | 1,929,544 | $ | 1,921,410 | ||||||||||
| Commercial and industrial | 430,749 | 425,334 | 420,095 | 423,864 | 414,490 | |||||||||||||||
| Commercial construction | 585,113 | 501,179 | 487,018 | 456,735 | 424,049 | |||||||||||||||
| Total commercial loans | 3,080,599 | 2,958,971 | 2,916,376 | 2,810,143 | 2,759,949 | |||||||||||||||
| Residential mortgages | 393,142 | 362,514 | 346,523 | 335,834 | 332,632 | |||||||||||||||
| Home equity loans and lines | 85,375 | 74,433 | 74,374 | 75,809 | 79,807 | |||||||||||||||
| Consumer | 8,515 | 8,096 | 8,394 | 8,370 | 8,130 | |||||||||||||||
| Total retail loans | 487,032 | 445,043 | 429,291 | 420,013 | 420,569 | |||||||||||||||
| Total loans | 3,567,631 | 3,404,014 | 3,345,667 | 3,230,156 | 3,180,518 | |||||||||||||||
| ACL for loans | (58,995 | ) | (57,905 | ) | (56,899 | ) | (55,002 | ) | (52,640 | ) | ||||||||||
| Net loans | $ | 3,508,636 | $ | 3,346,109 | $ | 3,288,768 | $ | 3,175,154 | $ | 3,127,878 | ||||||||||
Deposits are summarized as follows as of the periods indicated:
| (Dollars in thousands) | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||
| Non-interest checking | $ | 1,070,104 | $ | 1,130,732 | $ | 1,273,968 | $ | 1,247,253 | $ | 1,361,588 | ||||||||||
| Interest-bearing checking | 697,632 | 727,817 | 701,701 | 641,194 | 678,715 | |||||||||||||||
| Savings | 285,770 | 290,363 | 310,321 | 297,790 | 326,666 | |||||||||||||||
| Money market | 1,402,939 | 1,434,036 | 1,373,816 | 1,454,858 | 1,381,645 | |||||||||||||||
| CDs | 295,789 | 262,975 | 244,114 | 222,116 | 187,758 | |||||||||||||||
| CDs greater than | 225,287 | 214,480 | 171,678 | 152,945 | 99,434 | |||||||||||||||
| Deposits | $ | 3,977,521 | $ | 4,060,403 | $ | 4,075,598 | $ | 4,016,156 | $ | 4,035,806 | ||||||||||
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 December 31, 2023 | Three months ended September 30, 2023 | Three months ended December 31, 2022 | |||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | ||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||
| Loans and loans held for sale(2) (tax-equivalent) | $ | 3,467,945 | $ | 46,824 | 5.36 | % | $ | 3,372,754 | $ | 44,644 | 5.25 | % | $ | 3,118,304 | $ | 37,895 | 4.82 | % | |||||||||
| Investment securities(3) (tax-equivalent) | 799,093 | 4,345 | 2.17 | % | 820,156 | 4,444 | 2.17 | % | 952,975 | 5,099 | 2.14 | % | |||||||||||||||
| Other interest-earning assets(4) | 172,167 | 2,350 | 5.42 | % | 260,475 | 3,468 | 5.28 | % | 360,557 | 3,372 | 3.71 | % | |||||||||||||||
| Total interest-earnings assets (tax-equivalent) | 4,439,205 | 53,519 | 4.79 | % | 4,453,385 | 52,556 | 4.69 | % | 4,431,836 | 46,366 | 4.16 | % | |||||||||||||||
| Other assets | 78,102 | 82,190 | 71,289 | ||||||||||||||||||||||||
| Total assets | $ | 4,517,307 | $ | 4,535,575 | $ | 4,503,125 | |||||||||||||||||||||
| Liabilities and stockholders' equity: | |||||||||||||||||||||||||||
| Non-interest checking | $ | 1,155,307 | — | $ | 1,195,658 | — | $ | 1,442,108 | — | ||||||||||||||||||
| Interest checking, savings and money market | 2,427,089 | 10,786 | 1.76 | % | 2,481,814 | 9,185 | 1.47 | % | 2,413,646 | 2,211 | 0.36 | % | |||||||||||||||
| CDs | 500,286 | 5,035 | 3.99 | % | 430,376 | 3,704 | 3.41 | % | 260,265 | 769 | 1.17 | % | |||||||||||||||
| Total deposits | 4,082,682 | 15,821 | 1.54 | % | 4,107,848 | 12,889 | 1.24 | % | 4,116,019 | 2,980 | 0.29 | % | |||||||||||||||
| Borrowed funds | 7,572 | 43 | 2.24 | % | 4,938 | 28 | 2.30 | % | 2,999 | 13 | 1.69 | % | |||||||||||||||
| Subordinated debt(5) | 59,451 | 867 | 5.83 | % | 59,372 | 866 | 5.84 | % | 59,132 | 867 | 5.86 | % | |||||||||||||||
| Total funding liabilities | 4,149,705 | 16,731 | 1.60 | % | 4,172,158 | 13,783 | 1.31 | % | 4,178,150 | 3,860 | 0.37 | % | |||||||||||||||
| Other liabilities | 60,376 | 56,414 | 54,922 | ||||||||||||||||||||||||
| Total liabilities | 4,210,081 | 4,228,572 | 4,233,072 | ||||||||||||||||||||||||
| Stockholders' equity | 307,226 | 307,003 | 270,053 | ||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,517,307 | $ | 4,535,575 | $ | 4,503,125 | |||||||||||||||||||||
| Net interest-rate spread (tax-equivalent) | 2.57 | % | 2.85 | % | 3.60 | % | |||||||||||||||||||||
| Net interest income (tax-equivalent) | 36,788 | 38,773 | 42,506 | ||||||||||||||||||||||||
| Net interest margin (tax-equivalent) | 3.29 | % | 3.46 | % | 3.81 | % | |||||||||||||||||||||
| Less tax-equivalent adjustment | 270 | 271 | 341 | ||||||||||||||||||||||||
| Net interest income | $ | 36,518 | $ | 38,502 | $ | 42,165 | |||||||||||||||||||||
| Net interest margin | 3.27 | % | 3.43 | % | 3.78 | % | |||||||||||||||||||||
(1) Average yields and interest income are presented on a tax-equivalent basis, calculated using a U.S. federal income tax rate of
(2) Average loans and loans held for sale are presented at average 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.
ENTERPRISE BANCORP, INC.
Non-GAAP Financial Measures and Reconciliations
(unaudited)
NON-GAAP MEASURES
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with GAAP. However, certain financial measures we present are supplemental measures that are not required by or are not presented in accordance with GAAP. These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. In addition, the non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies; therefore, these measures may not be comparable to other similarly titled measures as presented by other companies.
The following tables summarize the reconciliation of GAAP to non-GAAP measures related to the impact of PPP loans on total loans:
| (Dollars in thousands) | December 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
| Total Loans, Excluding PPP Loans | ||||||||||||
| Total loans | $ | 3,567,631 | $ | 3,180,518 | $ | 2,920,684 | ||||||
| Adjustment: PPP loans | — | — | (71,502 | ) | ||||||||
| Total loans, excluding PPP loans (non-GAAP) | $ | 3,567,631 | $ | 3,180,518 | $ | 2,849,182 | ||||||
| Total loan growth, excluding PPP loans (non-GAAP) | 12.2 | % | 11.6 | % | ||||||||
Contact Info: Joseph R. Lussier, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5578
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