Enterprise Bancorp, Inc. Announces Third Quarter Financial Results
Enterprise Bancorp, Inc. (NASDAQ: EBTC) reported a net income of $9.8 million ($0.81 per diluted share) for Q3 2021, down from $10.3 million ($0.87) in Q3 2020. For the nine months ending September 30, 2021, net income rose to $31.3 million ($2.60 per diluted share) versus $21.6 million ($1.81) in the prior year. Key drivers included a $4.9 million contribution from PPP loan income and a reduction in credit loss provisions despite increased non-interest expenses. The company declared a quarterly dividend of $0.185 per share, payable December 1, 2021.
- Net income for YTD increased by $9.7 million, or 45%, compared to the prior year.
- Net interest income for Q3 increased by 7% to $35.9 million.
- Customer deposits grew by $494.7 million, a 14% increase over the last year.
- Net income for Q3 2021 decreased by $494 thousand compared to Q3 2020.
- Non-interest income dropped 29% in Q3, primarily due to a $1.8 million loss from interest-rate swap terminations.
- Total loans decreased by $225.8 million, or 7%, compared to December 31, 2020.
LOWELL, Mass., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the three months ended September 30, 2021 of
As previously announced on October 19, 2021, the Company declared a quarterly dividend of
Chief Executive Officer Jack Clancy commented, “I am pleased to report our strong third quarter and year-to-date financial results. Our financial results during the third quarter of 2021 were derived primarily from strong net interest income, which included
Mr. Clancy continued, “Our balance sheet remains characterized by high liquidity with interest-earning deposits with banks amounting to
Executive Chairman & Founder George Duncan commented, “During the third quarter of 2021, we achieved very positive accomplishments in our branch network. We completed the Lawrence, Massachusetts branch relocation and made great progress towards our Lexington, Massachusetts relocation, which we expect to complete in late December or early January. Construction on our 27th branch, which will be located in Londonderry, New Hampshire, has begun and we anticipate opening in the second quarter of 2022.”
On September 9, 2021, Enterprise Bank was recognized at the Boston Business Journal's Corporate Citizenship Summit as ranking 3rd for the highest average hours of community service and 51st among the largest corporate donors in Massachusetts. Mr. Duncan said, "I am personally very proud of this team accomplishment. Our commitment to the communities we serve is entrenched in our culture and reflects our deep sense of purpose as a genuine community bank.”
Net Income
Net income for the three and nine months ended September 30, 2021 amounted to
Net Interest Income
Net interest income for the three and nine months ended September 30, 2021 amounted to
- The quarter-to-date increase was due largely to increases in PPP loan income of
$1.4 million and investment security income of$668 thousand and lower deposit interest expense of$1.4 million , partially offset by lower non-PPP loan income of$1.5 million . - The year-to-date increase was due largely to an increase in PPP loan income of
$10.5 million and lower deposit interest expense of$6.6 million , partially offset by a decrease in non-PPP loan income of$7.2 million and an increase in subordinated debt interest expense of$1.2 million . - Net interest income included PPP loan income of
$4.9 million and$16.5 million for the three and nine month periods of 2021, compared to$3.5 million and$6.0 million for each of the respective periods in 2020.
Net Interest Margin
Tax equivalent net interest margin (“net interest margin” or “margin”) was
Margin has been negatively impacted by large balances in lower-yielding interest-earning deposits with banks, and to a lesser extent loan pay-downs and a lower interest rate environment, partially offset by accelerated SBA fee income on PPP loan forgiveness.
For the three months ended September 30, 2021 and 2020:
- The average interest-earning deposits with banks were
$675.7 million and$257.8 million . - The average PPP loan balances, net of deferred SBA fees, were
$223.6 million and$493.8 million . - Adjusted net interest margin (non-GAAP) was
3.68% and3.84% .
For the nine months ended September 30, 2021 and 2020:
- The average interest-earning deposits with banks were
$488.2 million and$146.5 million . - The average PPP loan balances, net of deferred SBA fees, were
$361.9 million and$288.0 million . - Adjusted net interest margin (non-GAAP) was
3.69% and3.87% .
Provision for Credit Losses
The provision for credit losses for the three and nine months ended September 30, 2021, amounted to
- The current three-and-nine-month provisions resulted primarily from core loan growth (non-GAAP) and an increase in reserves for unfunded commitments, partially offset by a reduction from changes in general loan loss reserve factors and declines in reserves for individually evaluated loans.
- The provision in the prior year periods reflected increases in reserves related to the anticipated impact of the COVID-19 pandemic on the credit quality of the loan portfolio and an increase in reserves for individually evaluated loans.
Non-Interest Income
Non-interest income for the three and nine months ended September 30, 2021, amounted to
- The decrease for the current three-month period resulted primarily from a
$1.8 million loss on the early termination of$75.0 million in interest-rate swaps used in hedges. - Excluding the interest-rate swap termination, non-interest income during the third quarter of 2021 increased
$602 thousand , compared to the prior period, resulting primarily from increases in wealth management fees of$299 thousand and deposit and interchange fees of$206 thousand , partially offset by decreases in net gains on sales of loans of$152 thousand and on sales of debt securities of$127 thousand . - Excluding the interest-rate swap termination, year-to-date non-interest income increased
$1.4 million , compared to the prior year, resulting primarily from increases in wealth management fees of$763 thousand , deposit and interchange fees of$266 thousand and equity securities market value gains of$290 thousand included in other income.
Non-Interest Expense
Non-interest expense for the three and nine months ended September 30, 2021, amounted to
- The increase for the current three-month period resulted primarily from increases in salaries and employee benefits of
$2.2 million , occupancy and equipment of$372 thousand and technology and telecommunications of$267 thousand due primarily to the Company's long-term growth and technology initiatives. - The increase for the current nine-month period resulted primarily from increases in salaries and employee benefits of
$3.1 million , occupancy and equipment of$911 thousand , technology and telecommunications of$1.1 million , and a loss on the redemption of subordinated debt of$713 thousand included in other operating expenses, partially offset by the decrease in deposit insurance premiums of$363 thousand . - The current three-and-nine-month results were impacted by increases of
$1.3 million and$1.8 million , respectively, in the Company's variable compensation incentive plan, which are included in salary and employee benefits. Excluding this increase, non-interest expense for the three and nine-month periods increased8% and6% over the comparable prior year results.
Adoption of CECL
In the first quarter of 2021, the Company adopted the Financial Accounting Standards Board's guidance related to measuring credit losses, including the current expected credit losses (“CECL”) methodology for estimating the allowance for credit losses ("ACL"). The CECL methodology requires earlier recognition of credit losses using a lifetime credit loss measurement approach that also requires the consideration of reasonable and supportable forecasts in the estimate.
The adoption of CECL resulted in the Company recording a net cumulative-effect adjustment, effective January 1, 2021, that decreased retained earnings by
Asset Quality
The ACL for loans amounted to
Net charge-offs for the three and nine months ended September 30, 2021 amounted to
Payment deferrals due to COVID-19 remained active on 4 loans, amounting to
Non-performing assets amounted to
- The Company had
$2.4 million in OREO at September 30, 2021, consisting of one commercial office building reclassified to OREO in April 2021, and had no OREO at December 31, 2020 and September 30, 2020. - The decrease in non-performing assets at September 30, 2021, compared to December 31, 2020, was due to the partial charge-off of two commercial relationships, including the note related to the OREO property discussed above, as well as principal pay-downs and credit upgrades based on improved performance, partially offset by additional downgrades.
- The increase in non-performing assets at December 31, 2020, compared to September 30, 2020, was due primarily to three commercial relationships, including the note related to the OREO property discussed above, which were placed on non-accrual in late 2020 and are in industries that have been highly impacted by the pandemic.
Balance Sheet
Total assets amounted to
Total interest-earning deposits with banks amounted to
Total investments amounted to
Total loans amounted to
- As of September 30, 2021, the Company had 846 PPP loans outstanding with a principal balance of
$153.6 million and deferred SBA fees of$5.3 million compared to 2,633 PPP loans outstanding with a principal balance of$453.1 million and deferred SBA fees of$10.0 million at December 31, 2020. - During the nine-month period ended September 30, 2021, PPP forgiveness payments received from the SBA amounted to
$507.3 million and round three PPP originations, which ended in May 2021, amounted to$207.8 million .
Total core loans (non-GAAP) amounted to
Customer deposits amounted to
Wealth assets under management, which are not carried as assets on the Company's consolidated balance sheets, amounted to
Capital
The Total Regulatory Capital and Tier 1 Capital to risk weighted asset ratios for the Company were
- The redemption of
$15.0 million of fixed-to-floating rate subordinated notes in the first quarter of 2021, which were classified as Tier 2 capital. Tier 1 capital was not impacted by the redemption. - The adoption of CECL in the first quarter of 2021,which resulted in a
$6.5 million deduction from capital. - Additionally, the Total Regulatory Capital and Tier 1 Capital ratios were positively impacted by growth in lower risk-weighted assets and retained earnings during the period.
Non-GAAP Measures
Throughout this press release we have noted certain balances, ratios or other measures of the Company’s performance which exclude the impact of PPP loans, which we expect to be short-term in nature. We refer to any balance, ratio or measure that excludes PPP loans as “core.” In addition, we refer to any balance, ratio or measure that excludes PPP loans and interest-earning deposits with banks as “adjusted.” The core and adjusted balances, ratios and measures were derived in order to provide more meaningful comparisons to prior periods as: (1) PPP loans outstanding have been originated within the last 18 months and the majority are expected to pay off during the next several quarters; and (2) growth in customer deposits and PPP loan pay-downs have led to temporarily high liquidity, carried as lower-yielding interest-earning deposits with banks, compared to prior periods. The tables beginning on page 10 provide a reconciliation of the non-GAAP measures to the information presented under U.S. generally accepted accounting principles (“GAAP”).
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 128 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, and commercial insurance services, 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 26 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, Nashua (2), Pelham, Salem and Windham. The Company is in the process of constructing a branch office in Londonderry, New Hampshire and anticipates that this location will open in the second quarter of 2022.
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,” “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, the impact of the ongoing COVID-19 pandemic, 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, changes in tax laws, and current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic. 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, 2021 | December 31, 2020 | September 30, 2020 | ||||||||
| Assets | |||||||||||
| Cash and cash equivalents: | |||||||||||
| Cash and due from banks | $ | 38,056 | $ | 40,636 | $ | 43,660 | |||||
| Interest-earning deposits with banks | 606,321 | 213,146 | 264,704 | ||||||||
| Total cash and cash equivalents | 644,377 | 253,782 | 308,364 | ||||||||
| Investments: | |||||||||||
| Debt securities at fair value (amortized cost of | 817,781 | 582,303 | 497,480 | ||||||||
| Equity securities at fair value | 1,441 | 746 | 651 | ||||||||
| Total investment securities at fair value | 819,222 | 583,049 | 498,131 | ||||||||
| Federal Home Loan Bank stock | 2,164 | 1,905 | 1,905 | ||||||||
| Loans held for sale | 413 | 371 | 5,311 | ||||||||
| Loans: | |||||||||||
| Total loans | 2,848,110 | 3,073,860 | 3,150,815 | ||||||||
| Allowance for credit losses | (47,262 | ) | (44,565 | ) | (43,835 | ) | |||||
| Net loans | 2,800,848 | 3,029,295 | 3,106,980 | ||||||||
| Premises and equipment, net | 44,630 | 46,708 | 47,145 | ||||||||
| Lease right-of-use asset | 24,477 | 18,439 | 18,580 | ||||||||
| Accrued interest receivable | 13,785 | 16,079 | 16,466 | ||||||||
| Deferred income taxes, net | 15,720 | 11,290 | 8,064 | ||||||||
| Bank-owned life insurance | 61,881 | 31,363 | 31,222 | ||||||||
| Prepaid income taxes | 3,542 | 2,449 | 3,388 | ||||||||
| Prepaid expenses and other assets | 14,717 | 13,938 | 9,335 | ||||||||
| Goodwill | 5,656 | 5,656 | 5,656 | ||||||||
| Total assets | $ | 4,451,432 | $ | 4,014,324 | $ | 4,060,547 | |||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Customer deposits | $ | 3,970,936 | $ | 3,476,268 | $ | 3,535,065 | |||||
| Brokered deposits | — | 74,995 | 74,995 | ||||||||
| Total deposits | 3,970,936 | 3,551,263 | 3,610,060 | ||||||||
| Borrowed funds | 8,600 | 4,774 | 1,679 | ||||||||
| Subordinated debt | 58,949 | 73,744 | 73,725 | ||||||||
| Lease liability | 23,748 | 17,539 | 17,690 | ||||||||
| Accrued expenses and other liabilities | 41,902 | 30,638 | 30,342 | ||||||||
| Accrued interest payable | 757 | 1,940 | 1,271 | ||||||||
| Total liabilities | 4,104,892 | 3,679,898 | 3,734,767 | ||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders’ Equity | |||||||||||
| Preferred stock, | — | — | — | ||||||||
| Common stock, | 120 | 119 | 119 | ||||||||
| Additional paid-in capital | 99,619 | 97,137 | 96,402 | ||||||||
| Retained earnings | 233,137 | 214,977 | 207,206 | ||||||||
| Accumulated other comprehensive income | 13,664 | 22,193 | 22,053 | ||||||||
| Total stockholders’ equity | 346,540 | 334,426 | 325,780 | ||||||||
| Total liabilities and stockholders’ equity | $ | 4,451,432 | $ | 4,014,324 | $ | 4,060,547 | |||||
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) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Interest and dividend income: | |||||||||||||||
| Loans and loans held for sale | $ | 33,420 | $ | 33,481 | $ | 100,730 | $ | 97,472 | |||||||
| Investment securities | 3,893 | 3,225 | 10,715 | 10,093 | |||||||||||
| Other interest-earning assets | 262 | 71 | 471 | 315 | |||||||||||
| Total interest and dividend income | 37,575 | 36,777 | 111,916 | 107,880 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 862 | 2,231 | 3,295 | 9,856 | |||||||||||
| Borrowed funds | 17 | 8 | 43 | 603 | |||||||||||
| Subordinated debt | 817 | 1,007 | 2,677 | 1,468 | |||||||||||
| Total interest expense | 1,696 | 3,246 | 6,015 | 11,927 | |||||||||||
| Net interest income | 35,879 | 33,531 | 105,901 | 95,953 | |||||||||||
| Provision for credit losses | 28 | 1,575 | 747 | 10,397 | |||||||||||
| Net interest income after provision for credit losses | 35,851 | 31,956 | 105,154 | 85,556 | |||||||||||
| Non-interest income: | |||||||||||||||
| Wealth management fees | 1,768 | 1,469 | 5,018 | 4,255 | |||||||||||
| Deposit and interchange fees | 1,813 | 1,607 | 5,070 | 4,804 | |||||||||||
| Income on bank-owned life insurance, net | 250 | 143 | 518 | 446 | |||||||||||
| Net gains on sales of debt securities | — | 127 | 128 | 227 | |||||||||||
| Net gains on sales of loans | 177 | 329 | 795 | 814 | |||||||||||
| Loss on termination of swaps | (1,847) | — | (1,847) | — | |||||||||||
| Other income | 918 | 649 | 2,448 | 1,986 | |||||||||||
| Total non-interest income | 3,079 | 4,324 | 12,130 | 12,532 | |||||||||||
| Non-interest expense: | |||||||||||||||
| Salaries and employee benefits | 17,224 | 15,031 | 49,377 | 46,267 | |||||||||||
| Occupancy and equipment expenses | 2,471 | 2,099 | 7,268 | 6,357 | |||||||||||
| Technology and telecommunications expenses | 2,583 | 2,316 | 7,877 | 6,815 | |||||||||||
| Advertising and public relations expenses | 435 | 372 | 1,602 | 1,506 | |||||||||||
| Audit, legal and other professional fees | 558 | 498 | 1,702 | 1,715 | |||||||||||
| Deposit insurance premiums | 593 | 749 | 1,327 | 1,690 | |||||||||||
| Supplies and postage expenses | 200 | 202 | 605 | 675 | |||||||||||
| Loss on extinguishment of subordinated debt | — | — | 713 | — | |||||||||||
| Other operating expenses | 1,705 | 1,502 | 5,138 | 4,752 | |||||||||||
| Total non-interest expense | 25,769 | 22,769 | 75,609 | 69,777 | |||||||||||
| Income before income taxes | 13,161 | 13,511 | 41,675 | 28,311 | |||||||||||
| Provision for income taxes | 3,329 | 3,185 | 10,352 | 6,712 | |||||||||||
| Net income | $ | 9,832 | $ | 10,326 | $ | 31,323 | $ | 21,599 | |||||||
| Basic earnings per common share | $ | 0.82 | $ | 0.87 | $ | 2.61 | $ | 1.82 | |||||||
| Diluted earnings per common share | $ | 0.81 | $ | 0.87 | $ | 2.60 | $ | 1.81 | |||||||
| Basic weighted average common shares outstanding | 12,022,610 | 11,916,486 | 11,997,199 | 11,886,811 | |||||||||||
| Diluted weighted average common shares outstanding | 12,065,100 | 11,927,043 | 12,038,562 | 11,908,716 | |||||||||||
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios
(unaudited)
| At or for the nine months ended | At or for the year ended | At or for the nine months ended | ||||||||||
| (Dollars in thousands, except per share data) | September 30, 2021 | December 31, 2020 | September 30, 2020 | |||||||||
| BALANCE SHEET DATA | ||||||||||||
| Total assets | $ | 4,451,432 | $ | 4,014,324 | $ | 4,060,547 | ||||||
| Wealth assets under management | 966,180 | 976,502 | 893,538 | |||||||||
| Total assets under management | $ | 5,417,612 | $ | 4,990,826 | $ | 4,954,085 | ||||||
| INCOME STATEMENT RATIOS (annualized) | ||||||||||||
| Return on average total assets | 0.98 | % | 0.82 | % | ||||||||
| Return on average stockholders’ equity | 12.47 | % | 9.95 | % | ||||||||
| Net interest margin (tax equivalent)(1) | 3.48 | % | 3.59 | % | ||||||||
| STOCKHOLDERS' EQUITY RATIOS | ||||||||||||
| Book value per common share | $ | 28.81 | $ | 28.01 | $ | 27.32 | ||||||
| Dividends paid per common share | $ | 0.56 | $ | 0.70 | $ | 0.53 | ||||||
| CAPITAL RATIOS | ||||||||||||
| Total capital to risk weighted assets | 14.15 | % | 14.62 | % | ||||||||
| Tier 1 capital to risk weighted assets | 10.93 | % | 10.77 | % | ||||||||
| Tier 1 capital to average assets | 7.42 | % | 7.52 | % | ||||||||
| Common equity tier 1 capital to risk weighted assets | 10.93 | % | 10.77 | % | ||||||||
| CREDIT QUALITY DATA | ||||||||||||
| Non-performing loans | $ | 27,835 | $ | 38,050 | $ | 21,641 | ||||||
| Non-performing assets | $ | 30,235 | $ | 38,050 | $ | 21,641 | ||||||
| Non-performing loans to total loans | 0.98 | % | 1.24 | % | ||||||||
| Non-performing loans to total core loans (non-GAAP)(2) | 1.03 | % | 1.45 | % | ||||||||
| Non-performing assets to total assets | 0.68 | % | 0.95 | % | ||||||||
| Allowance for credit losses to total loans | 1.66 | % | 1.45 | % | ||||||||
| Allowance for credit losses to total core loans (non-GAAP)(2) | 1.75 | % | 1.69 | % | ||||||||
| (1) | 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. | |
| (2) | See non-GAAP measures table below for PPP-adjusted balances referred to as core. |
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios (continued)
(unaudited)
NON-GAAP MEASURES
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with GAAP. However, certain financial measures and ratios we present, including PPP-adjusted metrics 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.
The following table summarizes the reconciliation of GAAP items to non-GAAP items related to the impact of PPP loans on total loans and assets:
| (Dollars in thousands) | September 30, 2021 | December 31, 2020 | September 30, 2020 | |||||||||
| TOTAL CORE LOANS | ||||||||||||
| Total loans | $ | 2,848,110 | $ | 3,073,860 | $ | 3,150,815 | ||||||
| Adjustment: PPP loans | (153,552 | ) | (453,084 | ) | (508,196 | ) | ||||||
| Adjustment: Deferred PPP fees | 5,312 | 10,014 | 13,495 | |||||||||
| Total core loans (non-GAAP) | $ | 2,699,870 | $ | 2,630,790 | $ | 2,656,114 | ||||||
The following table summarizes the reconciliation of GAAP items to non-GAAP items related to the impact of PPP loans and interest-earning deposits with banks:
| Three months ended | Three months ended | ||||||||||
| (Dollars in thousands) | September 30, 2021 | September 30, 2020 | |||||||||
| ADJUSTED INTEREST-EARNING ASSETS | |||||||||||
| Total average interest-earning assets | $ | 4,250,266 | $ | 3,898,091 | |||||||
| Adjustment: Average PPP loans, net | (223,611 | ) | (493,783 | ) | |||||||
| Adjustment: Average interest-earning deposits with banks | (675,746 | ) | (257,807 | ) | |||||||
| Total adjusted average interest-earning assets (non-GAAP) | $ | 3,350,909 | $ | 3,146,501 | |||||||
| ADJUSTED NET INTEREST INCOME | |||||||||||
| Net interest income (tax equivalent) | $ | 36,231 | $ | 33,886 | |||||||
| Adjustment: PPP income | (4,898 | ) | (3,469 | ) | |||||||
| Adjustment: Interest on interest-earning deposits with banks | (254 | ) | (59 | ) | |||||||
| Adjusted net interest income (tax equivalent) (non-GAAP) | $ | 31,079 | $ | 30,358 | |||||||
| ADJUSTED NET INTEREST MARGIN | |||||||||||
| Net interest margin (tax equivalent) | 3.39 | % | 3.46 | % | |||||||
| Adjustment: PPP effect(1) | (0.30 | )% | 0.10 | % | |||||||
| Adjustment: Interest-earning deposits with banks effect(2) | 0.59 | % | 0.28 | % | |||||||
| Adjusted net interest margin (tax equivalent) (non-GAAP) | 3.68 | % | 3.84 | % | |||||||
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios (continued)
(unaudited)
| Nine months ended | Nine months ended | ||||||||||
| (Dollars in thousands) | September 30, 2021 | September 30, 2020 | |||||||||
| ADJUSTED INTEREST-EARNING ASSETS | |||||||||||
| Total average interest-earning assets | $ | 4,108,528 | $ | 3,570,224 | |||||||
| Adjustment: Average PPP loans, net | (361,924 | ) | (287,969 | ) | |||||||
| Adjustment: Average interest-earning deposits with banks | (488,181 | ) | (146,457 | ) | |||||||
| Total adjusted average interest-earning assets (non-GAAP) | $ | 3,258,423 | $ | 3,135,798 | |||||||
| ADJUSTED INTEREST INCOME | |||||||||||
| Net interest income (tax equivalent)(3) | $ | 106,970 | $ | 97,026 | |||||||
| Adjustment: PPP income | (16,495 | ) | (5,990 | ) | |||||||
| Adjustment: Interest on interest-earning deposits with banks | (458 | ) | (191 | ) | |||||||
| Adjusted net interest income (tax equivalent) (non-GAAP) | $ | 90,017 | $ | 90,845 | |||||||
| ADJUSTED NET INTEREST MARGIN | |||||||||||
| Net interest margin (tax equivalent) | 3.48 | % | 3.63 | % | |||||||
| Adjustment: PPP effect(1) | (0.25 | )% | 0.08 | % | |||||||
| Adjustment: Interest-earning deposits with banks effect(2) | 0.46 | % | 0.16 | % | |||||||
| Adjusted net interest margin (tax equivalent) (non-GAAP) | 3.69 | % | 3.87 | % | |||||||
| (1) | PPP loan adjustments include an elimination of average PPP loans, net of deferred SBA fees, as well as interest income on PPP loans and related SBA fee accretion, included in net interest income. | |
| (2) | Interest-earning deposit adjustments include an elimination of average interest-earning deposits with banks, as well as interest income on interest-earning deposits with banks, included in net interest income. | |
| (3) | Nine-month results reflect tax equivalent adjustments as of September 30 of the years presented. |
Contact Info: Joseph R. Lussier, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5578
FAQ
What were Enterprise Bancorp's Q3 2021 earnings?
How did EBTC's net income compare year-over-year for the nine-month period ending September 30?
What is the status of EBTC's dividend declaration?
How much did EBTC's customer deposits increase over the year?
What was the impact of PPP loans on EBTC's financial results?
