EX-99 2 ex99-123118financialpressr.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. Completes its 30th Year and Announces 2018 Net Income of $28.9 Million    

LOWELL, Mass., January 24, 2019 (GLOBE NEWSWIRE) - Enterprise Bancorp, Inc. (the "Company" or "Enterprise") (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the year ended December 31, 2018 of $28.9 million, an increase of $9.5 million compared to the year ended December 31, 2017. Diluted earnings per share were $2.46 for the year ended December 31, 2018, compared to $1.66 for the year ended December 31, 2017. Net income for the three months ended December 31, 2018 amounted to $6.5 million, an increase of $3.8 million compared to the same three-month period in 2017. Diluted earnings per share were $0.55 for the three months ended December 31, 2018, compared to $0.23 for the same three-month period in 2017.

As previously announced on January 15, 2019, the Company declared a quarterly dividend of $0.16 per share to be paid on March 4, 2019 to shareholders of record as of February 11, 2019.

Chief Executive Officer Jack Clancy commented, "The increase in our fourth quarter and full year 2018 earnings compared to 2017 is largely attributable to our continued growth and lower tax expense in 2018 due to the 2017 Tax Cuts and Jobs Act (the "2017 Tax Act"). Total assets and total loans both increased 5% and customer deposits have increased 9% compared to December 31, 2017. The collective efforts and contributions of our dedicated Enterprise team, including active community involvement, relationship building, a customer-focused mindset, and ongoing enhancements to our leading-edge product and service offerings, continue to drive this growth. We are proud to be recognized for the 7th consecutive year on the Boston Globe's Top Places to Work list among large-sized companies in Massachusetts, with our 2018 ranking at number 3. Strategically, our focus is on our long-term success and our goal to be the best and most impactful independent community bank in America. This includes adhering to our mission to serve a higher purpose and make a positive contribution to society. To achieve this, our top priority has been and always will be ongoing investment in our greatest asset: our people. We remain focused on organic growth and continually planning for and investing in our future with an emphasis on people, technology, digital transformation, branch investment, and adding new branch locations."

Founder and Chairman of the Board George Duncan commented, "Thirty years ago, on January 3, 1989, we opened the doors of Enterprise Bank with the simple goal of being a locally-owned commercial bank committed to the success of our customers, communities, shareholders and team members.  Together, we have achieved so much in so many ways.  We now have 24 branch locations, are close to exceeding both $3.0 billion in total assets and $4.0 billion in assets under management and have been profitable every quarter since 1990.  We have been a partner to all our communities and have contributed significantly in both financial and human capital.  Yet, there is still so much to achieve.  Today, as on day one, we remain steadfastly independent and completely and deeply committed to all our stakeholders and the communities in which we operate and I am very confident the next thirty years will be even more special than the first thirty years."

Results of Operations

Net interest income for the year ended December 31, 2018 amounted to $108.8 million, an increase of $11.3 million, or 12%, compared to the year ended December 31, 2017. Net interest income for the three months ended December 31, 2018 amounted to $28.2 million, an increase of $2.2 million, or 8%, compared to the same period in 2017. The increase in net interest income was due largely to loan growth. Average loan balances (including loans held for sale) increased $173.0 million for the year ended December 31, 2018 and $107.8 million for the three months ended December 31, 2018, compared to the same 2017 respective period averages. Tax equivalent net interest margin ("margin") was 3.97% for both the years ended December 31, 2018 and December 31, 2017. Margin was 4.03% for the three months ended December 31, 2018, compared to 4.05% for the three months ended December 31, 2017.




For the years ended December 31, 2018 and December 31, 2017, the provision to the allowance for loan losses amounted to $2.3 million and $1.4 million, respectively. During the three months ended December 31, 2018, there was a reduction to the allowance for loan losses of $400 thousand, compared to a reduction of $200 thousand during the three months ended December 31, 2017.

The primary factor in the increase in the year-to-date provision for loan losses compared to the prior year was an increase in the balance of the allowance for loan losses allocated to impaired and classified loans of $857 thousand for the year ended December 31, 2018, compared to a decrease of $1.4 million during the year ended December 31, 2017. This increase in 2018 was primarily due to credit deterioration of several impaired and classified commercial relationships for which management determined additional provisions were necessary based on review of underlying collateral values, individual business circumstances, and credit metrics. The allowance allocated to general reserves for non-classified loans was relatively flat at December 31, 2018 compared to December 31, 2017, as provisions necessary for loan growth were offset by generally improved economic metrics.
Also affecting the provision for loan losses for the year ended December 31, 2018 compared to the prior year were:
•
Net charge-offs of $1.3 million for the year ended December 31, 2018, compared to net recoveries of $143 thousand for the year ended December 31, 2017.

•
Total non-performing loans as a percentage of total loans amounted to 0.49% at December 31, 2018, compared to 0.40% at December 31, 2017.

•
The ratio of adversely classified loans (substandard, doubtful, loss) to total loans amounted to 1.49% at December 31, 2018, compared to 1.16% at December 31, 2017.

•
Loan growth for the year ended December 31, 2018 was $117.6 million, compared to $247.2 million during the year ended December 31, 2017.

The allowance for loan losses to total loans ratio was 1.42% at December 31, 2018, compared to 1.45% at December 31, 2017.
Non-interest income for the year ended December 31, 2018 amounted to $12.0 million, a decrease of $3.7 million, or 24%, compared to the year ended December 31, 2017. Non-interest income for the three months ended December 31, 2018 amounted to $742 thousand, a decrease of $3.4 million, or 82%, compared to the same quarter in the prior year. Decreases in both quarterly and year-to-date non-interest income compared to the same prior year periods primarily resulted from a December 2018 partial restructure of the bond portfolio undertaken to improve future earnings by selling lower yielding bonds and reinvesting into slightly longer, higher yielding bonds.  The discretionary restructure resulted in realized losses of $2.9 million.
For the year ended December 31, 2018, non-interest expense amounted to $80.9 million, an increase of $4.7 million, or 6%, compared to the year ended December 31, 2017. Non-interest expense for the quarter ended December 31, 2018 amounted to $20.6 million, an increase of $1.5 million, or 8%, compared to the same quarter in the prior year. Increases in both quarterly and year-to-date non-interest 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 expenses and occupancy and equipment expenses. The year ended December 31, 2018 also included higher advertising and public relations expenses, which included the Company's Celebration of Excellence, a bi-annual community recognition event, in the second quarter of 2018.

The provision for income taxes amounted to $8.8 million for the year ended December 31, 2018, a decrease of $7.4 million, or 46%, compared to the year ended December 31, 2017. The provision for income taxes for the quarter ended December 31, 2018 amounted to $2.2 million, a decrease of $6.3 million, or 74%, compared to the same quarter in the prior year. Decreases in both the quarterly and year-to-date income tax provision compared to the same prior year periods were primarily due to a tax expense adjustment for the Bank's net deferred tax assets in 2017 of $4.8 million and the lower 2018 tax rate, both resulting from the 2017 Tax Act. Partially offsetting these decreases were lower tax benefits from equity compensation deductions in the current year (which amounted to


$302 thousand for the year ended December 31, 2018, compared to $922 thousand for the year ended December 31, 2017) and higher taxable income levels.

Key Financial Highlights

▪
Total assets amounted to $2.96 billion at December 31, 2018, compared to $2.82 billion at December 31, 2017, an increase of $146.8 million, or 5%. Since September 30, 2018, total assets have increased $73.8 million, or 3%.

▪
Total loans amounted to $2.39 billion at December 31, 2018, compared to $2.27 billion at December 31, 2017, an increase of $117.6 million, or 5%. Since September 30, 2018, total loans have increased $77.0 million, or 3%.

▪
Customer deposits (total deposits excluding brokered deposits) were $2.51 billion at December 31, 2018, compared to $2.29 billion at December 31, 2017, an increase of $214.1 million, or 9%. Since September 30, 2018, customer deposits have increased $20.1 million, or 1%.

▪
Investment assets under management amounted to $800.8 million at December 31, 2018, compared to $845.0 million at December 31, 2017, a decrease of $44.2 million, or 5%. Since September 30, 2018, investment assets under management have decreased $82.3 million, or 9%. The decrease in investment assets under management was primarily due to fluctuations in the financial markets.

▪
Total assets under management amounted to $3.85 billion at December 31, 2018, compared to $3.75 billion at December 31, 2017, an increase of $102.7 million, or 3%. Since September 30, 2018, total assets under management have decreased $11.2 million, or 0.3%.

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 117 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)
 
December 31,
2018
 
December 31,
2017
Assets
 
 

 
 

Cash and cash equivalents:
 
 

 
 

Cash and due from banks
 
$
43,865

 
$
40,310

Interest-earning deposits
 
19,255

 
14,496

Total cash and cash equivalents
 
63,120

 
54,806

Investment securities at fair value
 
432,921

 
405,206

Federal Home Loan Bank stock
 
5,357

 
5,215

Loans held for sale
 
701

 
208

Loans, less allowance for loan losses of $33,849 at December 31, 2018, and $32,915 at December 31, 2017
 
2,353,657

 
2,236,989

Premises and equipment, net
 
37,588

 
37,022

Accrued interest receivable
 
11,462

 
10,614

Deferred income taxes, net
 
11,747

 
10,751

Bank-owned life insurance
 
30,138

 
29,466

Prepaid income taxes
 
732

 
1,301

Prepaid expenses and other assets
 
11,279

 
20,330

Goodwill
 
5,656

 
5,656

Total assets
 
$
2,964,358

 
$
2,817,564

Liabilities and Stockholders' Equity
 
 
 
 
Liabilities
 
 
 
 
Deposits:
 
 
 
 
Customer deposits
 
$
2,507,999

 
$
2,293,872

Brokered deposits
 
56,783

 
147,490

Total deposits
 
2,564,782

 
2,441,362

Borrowed funds
 
100,492

 
89,000

Subordinated debt
 
14,860

 
14,847

Accrued expenses and other liabilities
 
27,948

 
40,067

Accrued interest payable
 
979

 
478

Total liabilities
 
2,709,061

 
2,585,754

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; 11,708,218 shares issued and outstanding at December 31, 2018, and 11,609,853 shares issued and outstanding at December 31, 2017
 
117

 
116

Additional paid-in capital
 
91,281

 
88,205

Retained earnings
 
165,183

 
143,073

Accumulated other comprehensive (loss) income
 
(1,284
)
 
416

Total stockholders' equity
 
255,297

 
231,810

Total liabilities and stockholders' equity
 
$
2,964,358

 
$
2,817,564



ENTERPRISE BANCORP, INC.
Consolidated Statements of Income
(unaudited)

 
Three months ended
 
Year ended
 
December 31,
 
December 31,
(Dollars in thousands, except per share data)
2018
 
2017
 
2018
 
2017
Interest and dividend income:
 
 
 
 
 
 
 
Loans and loans held for sale
$
29,304

 
$
26,015

 
$
111,090

 
$
96,559

Investment securities
2,893

 
2,144

 
10,728

 
8,045

Other interest-earning assets
267

 
126

 
1,085

 
428

Total interest and dividend income
32,464

 
28,285

 
122,903

 
105,032

Interest expense:
 

 
 

 
 

 
 

Deposits
3,990

 
1,878

 
12,760

 
5,995

Borrowed funds
51

 
168

 
383

 
590

Subordinated debt
233

 
233

 
925

 
925

Total interest expense
4,274

 
2,279

 
14,068

 
7,510

Net interest income
28,190

 
26,006

 
108,835

 
97,522

Provision for loan losses
(400
)
 
(200
)
 
2,250

 
1,430

Net interest income after provision for loan losses
28,590

 
26,206

 
106,585

 
96,092

Non-interest income:
 
 
 

 
 

 
 

Investment advisory fees
1,410

 
1,346

 
5,624

 
5,149

Deposit and interchange fees
1,626

 
1,622

 
6,234

 
6,011

Income on bank-owned life insurance, net
167

 
174

 
672

 
701

Net (losses) gains on sales of investment securities
(2,917
)
 
231

 
(2,950
)
 
716

Gains on sales of loans
81

 
101

 
260

 
460

Other income
375

 
683

 
2,150

 
2,637

Total non-interest income
742

 
4,157

 
11,990

 
15,674

Non-interest expense:
 
 
 
 
 
 
 
Salaries and employee benefits
12,912

 
11,718

 
51,257

 
48,379

Occupancy and equipment expenses
2,222

 
2,083

 
8,526

 
7,960

Technology and telecommunications expenses
1,622

 
1,583

 
6,382

 
6,372

Advertising and public relations expenses
949

 
842

 
3,367

 
2,855

Audit, legal and other professional fees
364

 
507

 
1,725

 
1,565

Deposit insurance premiums
433

 
405

 
1,697

 
1,535

Supplies and postage expenses
255

 
273

 
989

 
999

Other operating expenses
1,891

 
1,727

 
6,935

 
6,480

Total non-interest expense
20,648

 
19,138

 
80,878

 
76,145

Income before income taxes
8,684

 
11,225

 
37,697

 
35,621

Provision for income taxes
2,184

 
8,505

 
8,816

 
16,228

Net income
$
6,500

 
$
2,720

 
$
28,881

 
$
19,393

 
 
 
 
 
 
 
 
Basic earnings per share
$
0.56

 
$
0.23

 
$
2.47

 
$
1.68

Diluted earnings per share
$
0.55

 
$
0.23

 
$
2.46

 
$
1.66

 
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
11,703,337

 
11,602,188

 
11,679,520

 
11,568,430

Diluted weighted average common shares outstanding
11,763,444

 
11,685,151

 
11,750,462

 
11,651,763



ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios
(unaudited)

 
 
At or for the
year ended
 
At or for the
year ended
(Dollars in thousands, except per share data)
 
December 31, 2018
 
December 31, 2017
 
 
 
 
 
BALANCE SHEET AND OTHER DATA
 
 

 
 

Total assets
 
$
2,964,358

 
$
2,817,564

Loans serviced for others
 
89,232

 
89,059

Investment assets under management
 
800,751

 
844,977

Total assets under management
 
$
3,854,341

 
$
3,751,600

 
 
 
 
 
Book value per share
 
$
21.80

 
$
19.97

Dividends paid per common share
 
$
0.58

 
$
0.54

Total capital to risk weighted assets
 
11.77
%
 
11.21
%
Tier 1 capital to risk weighted assets
 
9.93
%
 
9.34
%
Tier 1 capital to average assets
 
8.56
%
 
8.22
%
Common equity tier 1 capital to risk weighted assets
 
9.93
%
 
9.34
%
Allowance for loan losses to total loans
 
1.42
%
 
1.45
%
Non-performing assets
 
$
11,784

 
$
9,032

Non-performing assets to total assets
 
0.40
%
 
0.32
%
 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
Return on average total assets
 
1.00
%
 
0.73
%
Return on average stockholders' equity
 
12.15
%
 
8.58
%
Net interest margin (tax equivalent)
 
3.97
%
 
3.97
%