Enterprise Bancorp, Inc. Completes Private Placement of $60.0 Million of Subordinated Notes

Rhea-AI Summary

Enterprise Bancorp, Inc. (NASDAQ: EBTC) has successfully completed a private placement of $60 million in subordinated notes due 2030. The notes feature an initial fixed rate of 5.25% for five years, transitioning to a floating rate thereafter. Proceeds will support corporate growth and strengthen regulatory capital ratios. CEO Jack Clancy expressed satisfaction with the offering's reception in the investment community. The Company is establishing a new branch in North Andover, expected to open in the second half of 2020.

Positive

• Successfully raised $60 million through subordinated notes.
• Fixed interest rate of 5.25% for the first five years.
• Proceeds will enhance corporate growth and regulatory capital.

Negative

• None.

LOWELL, Mass., July 07, 2020 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (the “Company”) (NASDAQ: EBTC), the holding company for Enterprise Bank and Trust Company (the “Bank”), today announced the completion of its private placement with registration rights of $60.0 million in fixed-to-floating rate subordinated notes due 2030 (the “Notes”). The Notes bear a fixed rate of 5.25% for the first five years and will reset quarterly thereafter to the then current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York, plus 517.5 basis points. The Company is entitled to redeem the Notes, in whole or in part, on any interest payment date on or after July 15, 2025, or at any time, in whole but not in part, upon certain other specified events.

The Company intends to use the net proceeds from the offering for general corporate purposes, organic growth and to support Bank regulatory capital ratios. Chief Executive Officer, Jack Clancy stated, “We are very pleased with the successful completion of our private placement of the Notes. Our offering of the Notes was well received by the investment community and will provide the Bank with additional capital at an attractive interest rate.”

Piper Sandler & Co. served as lead placement agent and Raymond James & Associates served as co-placement agent for the offering. Hunton Andrews Kurth LLP served as legal counsel to the Company and Cranmore, FitzGerald & Meaney served as legal counsel to the placement agents.

This press release is for informational purposes only and shall not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy the Notes, nor shall there be any sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

About Enterprise Bancorp, Inc.

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. 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, wealth services 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 Greater Merrimack Valley, Nashoba Valley, and North Central regions of Massachusetts and Southern New Hampshire (Southern Hillsborough and Rockingham counties). Enterprise Bank has 25 full-service branches located in the Massachusetts communities of Lowell (2), Acton, Andover, Billerica (2), Chelmsford (2), Dracut, Fitchburg, Lawrence, Leominster, Lexington, 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 a branch office in North Andover, Massachusetts and anticipates that this location will open as planned in the second half of 2020.

This press release contains statements that the Company believes are “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 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, 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 the Company’s reports filed with or furnished to the SEC, including the Company’s most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission, 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 press release are made as of the date hereof, and the Company undertakes no duty, and specifically disclaims 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.

Contact Info: Joseph R. Lussier, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5578

FAQ

What is the significance of the $60 million raised by EBTC?

The $60 million raised through subordinated notes will enhance Enterprise Bancorp's capital position and support corporate growth.

What are the terms of the subordinated notes issued by EBTC?

The subordinated notes have a fixed rate of 5.25% for the first five years and will reset quarterly based on the Secured Overnight Financing Rate plus 517.5 basis points.

When is the new branch of Enterprise Bank expected to open?

The new branch in North Andover, Massachusetts is anticipated to open in the second half of 2020.

Who were the placement agents for EBTC's subordinated notes offering?

Piper Sandler & Co. served as the lead placement agent, with Raymond James & Associates as co-placement agent.

Why is EBTC issuing subordinated notes now?

EBTC is issuing subordinated notes to support general corporate purposes, organic growth, and improve regulatory capital ratios.