EX-99 2 ex99-093018financialpressr.htm EXHIBIT 99 Exhibit
Exhibit 99

Contact Info:    James A. Marcotte, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5614

Enterprise Bancorp, Inc. Announces Third Quarter 2018    
Net Income of $8.0 Million

LOWELL, Mass., October 18, 2018 (GLOBE NEWSWIRE) - Enterprise Bancorp, Inc. (the "Company" or "Enterprise") (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the three months ended September 30, 2018 of $8.0 million, an increase of $2.5 million, or 45%, compared to the same three-month period in 2017. Diluted earnings per share were $0.68 for the three months ended September 30, 2018, compared to $0.47 for the same three-month period in 2017, an increase of 45%. Net income for the nine months ended September 30, 2018 amounted to $22.4 million, an increase of $5.7 million, or 34%, compared to the same nine-month period in 2017. Diluted earnings per share were $1.91 for the nine months ended September 30, 2018, compared to $1.43 for the same nine-month period in 2017, an increase of 34%.

As previously announced on October 16, 2018, the Company declared a quarterly dividend of $0.145 per share to be paid on December 3, 2018 to shareholders of record as of November 12, 2018. The 2018 dividend rate represents a 7.4% increase over the 2017 dividend rate.

Chief Executive Officer Jack Clancy commented, "The increase in our 2018 third quarter and year-to-date earnings compared to 2017 is largely attributable to our growth over the last twelve months and the positive impact of lower federal income tax rates in 2018 from the 2017 Tax Cuts and Jobs Act (the "2017 Tax Act"). Total assets, loans, and customer deposits have increased 6%, 5%, and 12%, respectively, compared to September 30, 2017. The collective efforts and contributions of our dedicated Enterprise team, including active community involvement, relationship building and a customer-focused mindset, and ongoing enhancements to our leading-edge product and service offerings, continue to drive this growth. Strategically, our focus remains on organic growth and continually planning for and investing in our future, as we continue to actively look for new branch locations."

Founder and Chairman of the Board George Duncan commented, "With the opening in August of our beautifully renovated Mortgage Center at 170 Merrimack Street in Lowell, MA, Enterprise Bank offers a convenient location for customers to meet with our mortgage team, as well as a new focal point of the Enterprise downtown Lowell campus. At Enterprise, we are deeply committed to our customers, and this latest expansion downtown is particularly exciting as we prepare to celebrate this coming January the 30th anniversary of the opening of our first office, located at 222 Merrimack Street."

Results of Operations

Net interest income for the three months ended September 30, 2018 amounted to $27.4 million, an increase of $2.3 million, or 9%, compared to the same period in 2017. Net interest income for the nine months ended September 30, 2018 amounted to $80.6 million, an increase of $9.1 million, or 13%, compared to the nine months ended September 30, 2017. The increase in net interest income was due largely to loan growth. Average loan balances (including loans held for sale) increased $163.0 million for the three months ended September 30, 2018, and $195.0 million for the nine months ended September 30, 2018, compared to the same 2017 respective period averages. Additionally, net interest margin ("margin") was 3.89% for the three months ended September 30, 2018, compared to 4.03% for the three months ended September 30, 2017. Margin was 3.95% for both the nine months ended September 30, 2018 and September 30, 2017.

For the three months ended September 30, 2018, the provision to the allowance for loan losses amounted to $750 thousand, compared to $1.2 million during the three months ended September 30, 2017. For the nine months ended September 30, 2018 and September 30, 2017, the provision to the allowance for loan losses amounted to $2.7 million and $1.6 million, respectively.





The primary factor in the increase in the year-to-date provision for loan losses compared to the prior year was a $1.4 million increase in the balance of the allowance for loan losses allocated to impaired and classified loans for the nine months ended September 30, 2018, compared to a decrease of $762 thousand during the nine months ended September 30, 2017. This increase in 2018 was primarily due to credit deterioration of impaired and classified commercial relationships for which management determined that the additional provisions were necessary based on a review of underlying collateral values, individual business circumstances, and credit metrics.
Also affecting the provision for loan losses compared to the prior year were:
Net charge-offs of $1.0 million for the nine months ended September 30, 2018, compared to net recoveries of $212 thousand for the nine months ended September 30, 2017.

Total non-performing loans as a percentage of total loans amounted to 0.50% at September 30, 2018, compared to 0.57% at September 30, 2017.

The ratio of adversely classified loans (substandard, doubtful, loss) to total loans amounted to 1.54% at September 30, 2018, compared to 1.32% at September 30, 2017.

Loan growth for the nine months ended September 30, 2018 was $40.6 million, compared to $179.6 million during the nine months ended September 30, 2017.

The allowance for loan losses to total loans ratio was 1.49% at September 30, 2018, 1.45% at December 31, 2017, and 1.51% at September 30, 2017.
Non-interest income for the three months ended September 30, 2018 amounted to $3.7 million, an increase of $280 thousand, or 8%, compared to the same quarter in the prior year. Non-interest income for the nine months ended September 30, 2018 amounted to $11.2 million, a decrease of $269 thousand, or 2%, compared to the nine months ended September 30, 2017. The changes in both the quarter and year-to-date periods were primarily due to gains or losses on investment security sales in the prior periods. In the 2018 year-to-date period, the Company benefited from increases in investment advisory fees.
Non-interest expense for the quarter ended September 30, 2018 amounted to $20.0 million, an increase of $1.1 million, or 6%, compared to the same quarter in the prior year. For the nine months ended September 30, 2018, non-interest expense amounted to $60.2 million, an increase of $3.2 million, or 6%, compared to the nine months ended September 30, 2017. Increases in expenses over the same periods in the prior year primarily related to the Company's strategic growth and market initiatives, particularly salaries and employee benefits expense, occupancy and equipment expenses, and other professional costs. The 2018 year-to-date period also included higher advertising and public relations expenses, which included the Company's Celebration of Excellence, a community recognition event, in the second quarter of 2018.

The provision for income taxes for the quarter ended September 30, 2018 amounted to $2.4 million, a decrease of $585 thousand, or 19%, compared to the same quarter in the prior year. The provision for income taxes amounted to $6.6 million for the nine months ended September 30, 2018, a decrease of $1.1 million, or 14%, compared to the nine months ended September 30, 2017. Decreases in the income tax provision were primarily due to the positive impact of the 2017 Tax Act, partially offset by lower tax benefits from equity compensation deductions in the current year (which amounted to $274 thousand for the nine months ended September 30, 2018, compared to $832 thousand for the nine months ended September 30, 2017) and higher taxable income levels.

Key Financial Highlights

Total assets amounted to $2.89 billion at September 30, 2018, compared to $2.82 billion at December 31, 2017, an increase of $73.0 million, or 3%. Since June 30, 2018, total assets have decreased $43.4 million, or 1%, due primarily to a decrease in cash and cash equivalents mainly from the maturity of brokered CDs.




Total loans amounted to $2.31 billion at September 30, 2018, compared to $2.27 billion at December 31, 2017, an increase of $40.6 million, or 2%. Since June 30, 2018, total loans have increased $11.9 million, or 1%.

Customer deposits (total deposits excluding brokered deposits) were $2.49 billion at September 30, 2018, compared to $2.29 billion at December 31, 2017, an increase of $194.0 million, or 8%. Since June 30, 2018, customer deposits have increased $6.3 million, or 0.3%.

Investment assets under management amounted to $883.0 million at September 30, 2018, compared to $845.0 million at December 31, 2017, an increase of $38.1 million, or 5%. Since June 30, 2018, investment assets under management have increased $34.9 million, or 4%.

Total assets under management amounted to $3.87 billion at September 30, 2018, compared to $3.75 billion at December 31, 2017, an increase of $114.0 million, or 3%. Since June 30, 2018, total assets under management have decreased $9.0 million, or 0.2%.

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 116 consecutive profitable quarters. The Company 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 banking options, and insurance services. The Company also provides a range of investment advisory, wealth management 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 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, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough and Westford and in the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem and Windham.

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 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, the receipt of required regulatory approvals, and changes in tax laws including, among other risks, potential future tax rate changes, and the risk that costs associated with the 2017 Tax Act and changes to the deferred tax assets and liabilities may be greater than expected. 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.



ENTERPRISE BANCORP, INC.
Consolidated Balance Sheets
(unaudited)
 
(Dollars in thousands)
 
September 30,
2018
 
December 31,
2017
 
September 30,
2017
Assets
 
 

 
 

 
 
Cash and cash equivalents:
 
 

 
 

 
 
Cash and due from banks
 
$
29,453

 
$
40,310

 
$
35,920

Interest-earning deposits
 
35,672

 
14,496

 
14,771

Total cash and cash equivalents
 
65,125

 
54,806

 
50,691

Investment securities at fair value
 
434,280

 
405,206

 
385,942

Federal Home Loan Bank stock
 
2,593

 
5,215

 
7,225

Loans held for sale
 
618

 
208

 
876

Loans, less allowance for loan losses of $34,534 at September 30, 2018, $32,915 at December 31, 2017, and $33,184 at September 30, 2017
 
2,275,958

 
2,236,989

 
2,169,189

Premises and equipment, net
 
37,649

 
37,022

 
36,260

Accrued interest receivable
 
11,701

 
10,614

 
10,088

Deferred income taxes, net
 
14,040

 
10,751

 
15,889

Bank-owned life insurance
 
29,971

 
29,466

 
29,292

Prepaid income taxes
 
1,017

 
1,301

 
906

Prepaid expenses and other assets
 
11,996

 
20,330

 
13,458

Goodwill
 
5,656

 
5,656

 
5,656

Total assets
 
$
2,890,604

 
$
2,817,564

 
$
2,725,472

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Customer deposits
 
$
2,487,873

 
$
2,293,872

 
$
2,220,181

Brokered deposits
 
123,839

 
147,490

 
82,492

Total deposits
 
2,611,712

 
2,441,362

 
2,302,673

Borrowed funds
 
497

 
89,000

 
149,255

Subordinated debt
 
14,857

 
14,847

 
14,844

Accrued expenses and other liabilities
 
20,238

 
40,067

 
26,540

Accrued interest payable
 
1,315

 
478

 
273

Total liabilities
 
2,648,619

 
2,585,754

 
2,493,585

Commitments and Contingencies
 
 
 
 
 
 
Stockholders’ 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; 11,703,874 shares issued and outstanding at September 30, 2018, 11,609,853 shares issued and outstanding at December 31, 2017, and 11,599,266 shares issued and outstanding at September 30, 2017
 
117

 
116

 
116

Additional paid-in capital
 
90,725

 
88,205

 
87,492

Retained earnings
 
160,380

 
143,073

 
141,992

Accumulated other comprehensive (loss) income
 
(9,237
)
 
416

 
2,287

Total stockholders’ equity
 
241,985

 
231,810

 
231,887

Total liabilities and stockholders’ equity
 
$
2,890,604

 
$
2,817,564

 
$
2,725,472




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)
2018
 
2017
 
2018
 
2017
Interest and dividend income:
 
 
 
 
 
 
 
Loans and loans held for sale
$
28,109

 
$
24,892

 
$
81,786

 
$
70,544

Investment securities
2,742

 
2,017

 
7,835

 
5,901

Other interest-earning assets
497

 
136

 
818

 
302

Total interest and dividend income
31,348

 
27,045

 
90,439

 
76,747

Interest expense:
 

 
 

 
 

 
 

Deposits
3,697

 
1,509

 
8,770

 
4,117

Borrowed funds
6

 
169

 
332

 
422

Subordinated debt
233

 
233

 
692

 
692

Total interest expense
3,936

 
1,911

 
9,794

 
5,231

Net interest income
27,412

 
25,134

 
80,645

 
71,516

Provision for loan losses
750

 
1,225

 
2,650

 
1,630

Net interest income after provision for loan losses
26,662

 
23,909

 
77,995

 
69,886

Non-interest income:
 
 
 

 
 

 
 

Investment advisory fees
1,388

 
1,311

 
4,214

 
3,803

Deposit and interchange fees
1,552

 
1,527

 
4,608

 
4,389

Income on bank-owned life insurance, net
167

 
174

 
505

 
527

Net (losses) gains on sales of investment securities
(34
)
 
(284
)
 
(33
)
 
485

Gains on sales of loans
47

 
88

 
179

 
359

Other income
604

 
628

 
1,775

 
1,954

Total non-interest income
3,724

 
3,444

 
11,248

 
11,517

Non-interest expense:
 
 
 
 
 
 
 
Salaries and employee benefits
12,970

 
12,177

 
38,345

 
36,661

Occupancy and equipment expenses
2,110

 
1,993

 
6,304

 
5,877

Technology and telecommunications expenses
1,568

 
1,601

 
4,760

 
4,789

Advertising and public relations expenses
586

 
597

 
2,418

 
2,013

Audit, legal and other professional fees
435

 
381

 
1,361

 
1,058

Deposit insurance premiums
418

 
371

 
1,264

 
1,130

Supplies and postage expenses
236

 
248

 
734

 
726

Other operating expenses
1,652

 
1,465

 
5,044

 
4,753

Total non-interest expense
19,975

 
18,833

 
60,230

 
57,007

Income before income taxes
10,411

 
8,520

 
29,013

 
24,396

Provision for income taxes
2,429

 
3,014

 
6,632

 
7,723

Net income
$
7,982

 
$
5,506

 
$
22,381

 
$
16,673

 
 
 
 
 
 
 
 
Basic earnings per share
$
0.68

 
$
0.48

 
$
1.92

 
$
1.44

Diluted earnings per share
$
0.68

 
$
0.47

 
$
1.91

 
$
1.43

 
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
11,697,951

 
11,589,039

 
11,671,494

 
11,557,054

Diluted weighted average common shares outstanding
11,770,719

 
11,669,159

 
11,745,935

 
11,640,373




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, 2018
 
December 31, 2017
 
September 30, 2017
 
 
 
 
 
 
 
BALANCE SHEET AND OTHER DATA
 
 

 
 

 
 

Total assets
 
$
2,890,604

 
$
2,817,564

 
$
2,725,472

Loans serviced for others
 
91,931

 
89,059

 
86,738

Investment assets under management
 
883,032

 
844,977

 
800,499

Total assets under management
 
$
3,865,567

 
$
3,751,600

 
$
3,612,709

 
 
 
 
 
 
 
Book value per share
 
$
20.68

 
$
19.97

 
$
19.99

Dividends paid per common share
 
$
0.435

 
$
0.540

 
$
0.405

Total capital to risk weighted assets
 
11.98
%
 
11.21
%
 
11.57
%
Tier 1 capital to risk weighted assets
 
10.12
%
 
9.34
%
 
9.65
%
Tier 1 capital to average assets
 
8.34
%
 
8.22
%
 
8.40
%
Common equity tier 1 capital to risk weighted assets
 
10.12
%
 
9.34
%
 
9.65
%
Allowance for loan losses to total loans
 
1.49
%
 
1.45
%
 
1.51
%
Non-performing assets
 
$
11,621

 
$
9,032

 
$
12.489

Non-performing assets to total assets
 
0.40
%
 
0.32
%
 
0.46
%
 
 
 
 
 
 
 
INCOME STATEMENT DATA (annualized)
 
 
 
 
 
 
Return on average total assets
 
1.04
%
 
0.73
%
 
0.85
%
Return on average stockholders’ equity
 
12.74
%
 
8.58
%
 
9.97
%
Net interest margin (tax equivalent)
 
3.95
%
 
3.97
%
 
3.95
%