Enterprise Bancorp, Inc. Announces 2013 Third Quarter Net Income of $3.5 Million; Strong Loan and Deposit Growth
LOWELL, Mass., Oct. 17, 2013 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (the "Company") (Nasdaq:EBTC), parent of Enterprise Bank, announces net income for the three months ended September 30, 2013 of $3.5 million, an increase of $470 thousand, or 15%, compared to the same three-month period in 2012. Diluted earnings per share were $0.35 for the three months ended September 30, 2013, an increase of 9% compared to the same period in 2012. Net income for the nine months ended September 30, 2013 amounted to $10.0 million, an increase of $904 thousand, or 10%, compared to the same nine-month period in 2012. Diluted earnings per share were $1.01 for the nine months ended September 30, 2013, an increase of 6% compared to the same period in 2012.
As previously announced on October 15, 2013, the Company declared a quarterly dividend of $0.115 per share to be paid on December 2, 2013 to shareholders of record as of November 11, 2013. The quarterly dividend represents a 4.5% increase over the 2012 dividend rate.
Total assets increased by $166.8 million, or 10%, since December 31, 2012, amounting to $1.83 billion at September 30, 2013. Loans outstanding and deposits, excluding brokered deposits, have increased $113.0 million, or 8%, and $130.4 million, or 9%, respectively, in the first nine months of 2013.
Chief Executive Officer Jack Clancy commented, "Our results reflect our continued organic growth and market expansion. On an annualized basis, total assets, loans and deposits, excluding brokered deposits, have grown 13%, 11% and 12%, respectively, in 2013. We remain focused on organic growth with investments in technology, our communities, and most importantly, our family of Enterprise employees as we look to continue to strengthen our franchise in Massachusetts and Southern New Hampshire."
George L. Duncan, Founder and Chairman, commented that "Our expanding branch network and our highly-skilled and experienced banking team, combined with state-of-the-art products and services, position us well for the future. We are looking forward to our new Nashua, NH office, our 22nd branch location, which is scheduled to open in the fourth quarter of this year. As we complete our 25th year in business, we continue to focus our efforts to play a leadership role in all the communities we serve. We appreciate that our philanthropic efforts were recognized in September for both contributions to non-profits, and hours of community service at the 'Salute to Corporate Citizenship Summit' sponsored by the Boston Business Journal, our seventh consecutive year honored. We thank all our non-profit customers for all the support they have given our Bank since our founding and we are so appreciative of our shared community values and commitment."
Results of Operations
The Company's growth contributed to increases in net interest income, non-interest income and the level of operating expenses for the current year compared to the same 2012 periods. Additionally, the September 30, 2013 results benefited from a lower loan loss provision compared to the same periods in 2012. Non-interest income also increased as a result of higher gains on securities sales in the current year.
Net interest income for the three months ended September 30, 2013 amounted to $16.6 million, an increase of $985 thousand, or 6%, compared to the same period in 2012. Net interest income for the nine months ended September 30, 2013 amounted to $48.6 million, an increase of $2.6 million, or 6%, compared to the same period in 2012. This increase in net interest income was due primarily to revenue generated from loan growth, mainly in commercial real estate loans, partially offset by a decrease in tax equivalent net interest margin ("margin"). Average loan balances (including loans held for sale) increased $166.5 million and $156.0 million for the three and nine months ended September 30, 2013, respectively, compared to the same periods in 2012. Net interest margin was 4.02% for the quarter ended September 30, 2013, compared to 4.20% for the quarter ended September 30, 2012. Year-to-date margins were 4.09% and 4.29% for the nine months ended September 30, 2013 and 2012, respectively. Consistent with the industry, the margin continued to trend downward, as the yield on interest-earning assets declined faster than the cost of funding, as funding rates have reached a level leaving little room for significant reductions.
The provision for loan losses amounted to $583 thousand for the three months ended September 30, 2013, compared to $800 thousand for the same period in 2012. For the nine months ended September 30, 2013 and 2012, the provision for loan losses amounted to $1.9 million and $2.2 million, respectively. In determining the provision to the allowance for loan losses, management takes into consideration the level of loan growth and an estimate of credit risk, which includes such items as adversely classified and non-performing loans, the estimated specific reserves needed for impaired loans, the level of net charge-offs, and the estimated impact of current economic conditions on credit quality. The level of loan growth for the nine months ended September 30, 2013, was $113.0 million, compared to $52.9 million during the same period in 2012. Total non-performing assets as a percentage of total assets were 1.09% at September 30, 2013, compared to 1.50% at September 30, 2012. For the nine months ended September 30, 2013, the Company recorded net charge-offs of $155 thousand compared to $1.4 million for the nine months ended September 30, 2012. Management continues to closely monitor the non-performing assets, charge-offs and necessary allowance levels, including specific reserves. The allowance for loan losses to total loans ratio was 1.77% at September 30, 2013, 1.78% at December 31, 2012 and 1.84% at September 30, 2012.
Non-interest income for the three and nine months ended September 30, 2013 amounted to $3.2 million and $10.4 million, respectively. This represents increases of $183 thousand, or 6%, and $1.4 million, or 16% compared to the same three and nine month periods, respectively, in 2012. Current year non-interest income benefited primarily from gains on securities sales, with the majority of sales occurring in the first six months of 2013. The quarter and year-to-date increases also included increases in investment advisory fee income and deposit and interchange fees.
Non-interest expense for the three months ended September 30, 2013 amounted to $13.8 million, an increase of $771 thousand, or 6%, compared to the third quarter of 2012. For the nine months ended September 30, 2013, non-interest expense amounted to $41.7 million, an increase of $2.9 million, or 7%, compared to the same period in the prior year. Increased expenses related to salaries and benefits over the comparable periods in the prior year were primarily due to the Company's strategic growth initiatives, including branch and market expansion. This growth also resulted in increased occupancy and technology expenses in the current year-to-date period compared to the same period in 2012. Also impacting the current year-to-date period were increases in advertising, primarily due to the timing of corporate community events, and "other expenses" primarily due to deposit program and loan servicing costs.
Key Financial Highlights
-- Total assets were $1.83 billion at September 30, 2013 as compared to $1.67 billion at December 31, 2012, an increase of $166.8 million, or 10%. Since June 30, 2013, total assets have increased $79.2 million, or 5%. -- Total loans amounted to $1.47 billion at September 30, 2013, an increase of $113.0 million, or 8%, since December 31, 2012. Since June 30, 2013, total loans have increased $25.4 million, or 2%. -- Total deposits, excluding brokered deposits, were $1.60 billion at September 30, 2013 as compared to $1.47 billion at December 31, 2012, an increase of $130.4 million, or 9%. Since June 30, 2013, total deposits, excluding brokered deposits, increased $75.6 million, or 5%. Brokered deposits were $51.5 million at September 30, 2013, $52.5 million at June 30, 2013 and $3.0 million at December 31, 2012. -- Investment assets under management amounted to $638.2 million at September 30, 2013 as compared to $592.4 million at December 31, 2012, an increase of $45.8 million, or 8%. Since June 30, 2013, investment assets under management have increased $25.0 million, or 4%. The increase is primarily attributable to asset growth from new business and from market value appreciation. -- Total assets under management amounted to $2.54 billion at September 30, 2013, compared to $2.33 billion at December 31, 2012, an increase of $210.3 million, or 9%. Since June 30, 2013, total assets under management have increased $102.4 million, or 4%.
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 96 consecutive profitable quarters. The Company principally is engaged in the business of attracting deposits from the general public and investing in commercial loans and investment securities. Through the bank and its subsidiaries, the Company offers a range of commercial and consumer loan products, deposit and cash management products as well as investment advisory and wealth management, and insurance services. The Company's headquarters and the bank's main office are located at 222 Merrimack Street in Lowell, Massachusetts. The Company's primary market area is the Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. Enterprise Bank has 21 full-service branch offices located in the Massachusetts cities and towns of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster,
Methuen, Tewksbury, Tyngsborough and Westford and in the New Hampshire towns of Derry, Hudson, Pelham and Salem. The Company is also completing construction on our new Nashua, NH office which is scheduled to open in the fourth quarter of 2013.
The above text 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 reference to a future period or periods or by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," 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 and competition. For more information about these factors, please see 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 press 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.
ENTERPRISE BANCORP, INC. Consolidated Balance Sheets (unaudited) September 30, December 31, September 30, (Dollars in thousands) 2013 2012 2012 ---------------------------------- ------------- ------------ ------------- Assets Cash and cash equivalents: Cash and due from banks $ 48,960 $ 38,007 $ 50,978 Interest-earning deposits 33,944 12,218 25,413 Fed funds sold 26,003 2,510 5,879 ------------- ------------ ------------- Total cash and cash equivalents 108,907 52,735 82,270 ------------- ------------ ------------- Investment securities at fair value 195,418 184,464 191,696 Federal Home Loan Bank stock 4,324 4,260 4,260 Loans held for sale 1,061 8,557 5,686 Loans, less allowance for loan losses of $25,999 at September 30, 2013, $24,254 at December 31, 2012 and $23,930 at September 30, 2012 1,446,697 1,335,401 1,274,437 Premises and equipment 28,860 27,206 27,267 Accrued interest receivable 5,835 5,828 5,830 Deferred income taxes, net 13,489 12,548 12,132 Bank-owned life insurance 15,789 15,443 15,321 Prepaid income taxes 736 174 719 Prepaid expenses and other assets 5,777 13,454 12,273 Goodwill 5,656 5,656 5,656 ------------- ------------ ------------- Total assets $ 1,832,549 $ 1,665,726 $ 1,637,547 ============= ============ ============= Liabilities and Stockholders' Equity Liabilities Deposits $ 1,653,947 $ 1,475,027 $ 1,470,426 Borrowed funds 1,880 26,540 2,994 Junior subordinated debentures 10,825 10,825 10,825 Accrued expenses and other liabilities 17,393 13,182 16,444 Accrued interest payable 267 603 323 ------------- ------------ ------------- Total liabilities 1,684,312 1,526,177 1,501,012 ------------- ------------ ------------- 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; 20,000,000 shares authorized; 9,964,730, shares issued and outstanding at September 30, 2013 (including 169,693 shares of unvested participating restricted awards), 9,676,477 issued and outstanding at December 31, 2012 (including 154,186 shares of unvested participating restricted awards) and 9,632,904 shares issued and outstanding at September 30, 2012 (including 153,336 of unvested participating restricted awards) 100 97 96 Additional paid-in capital 52,092 48,194 47,304 Retained earnings 93,815 87,159 84,985 Accumulated other comprehensive income 2,230 4,099 4,150 ------------- ------------ ------------- Total stockholders' equity 148,237 139,549 136,535 ------------- ------------ ------------- Total liabilities and stockholders' equity $ 1,832,549 $ 1,665,726 $ 1,637,547 ============= ============ ============= 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) 2013 2012 2013 2012 ----------------------- ----------- ------------ ------------ ------------ Interest and dividend income: Loans and loans held for sale $ 17,104 $ 16,324 $ 50,130 $ 48,510 Investment securities 823 833 2,427 2,467 Other interest-earning assets 19 25 40 68 ----------- ------------ ------------ ------------ Total interest and dividend income 17,946 17,182 52,597 51,045 Interest expense: Deposits 1,013 1,228 3,043 4,133 Borrowed funds 6 12 92 41 Junior subordinated debentures 294 294 883 883 ----------- ------------ ------------ ------------ Total interest expense 1,313 1,534 4,018 5,057 ----------- ------------ ------------ ------------ Net interest income 16,633 15,648 48,579 45,988 Provision for loan losses 583 800 1,900 2,150 ----------- ------------ ------------ ------------ Net interest income after provision for loan losses 16,050 14,848 46,679 43,838 ----------- ------------ ------------ ------------ Non-interest income: Investment advisory fees 1,102 925 3,163 2,880 Deposit and interchange fees 1,229 1,153 3,518 3,281 Income on bank-owned life insurance, net 111 122 346 384 Net gains on sales of investment securities 83 38 1,031 197 Gains on sales of loans 171 211 728 669 Other income 472 536 1,574 1,500 ----------- ------------ ------------ ------------ Total non-interest income 3,168 2,985 10,360 8,911 ----------- ------------ ------------ ------------ Non-interest expense: Salaries and employee benefits 8,548 8,190 25,247 23,534 Occupancy and equipment expenses 1,449 1,400 4,508 4,244 Technology and telecommunications expenses 1,085 1,122 3,441 3,198 Advertising and public relations expenses 481 408 2,047 1,694 Audit, legal and other professional fees 439 336 1,264 1,306 Deposit insurance premiums 287 283 820 843 Supplies and postage expenses 232 232 719 659 Investment advisory and custodial
expenses 134 110 394 319 Other operating expenses 1,126 929 3,256 3,003 ----------- ------------ ------------ ------------ Total non-interest expense 13,781 13,010 41,696 38,800 ----------- ------------ ------------ ------------ Income before income taxes 5,437 4,823 15,343 13,949 Provision for income taxes 1,904 1,760 5,298 4,808 ----------- ------------ ------------ ------------ Net income $ 3,533 $ 3,063 $ 10,045 $ 9,141 =========== ============ ============ ============ Basic earnings per share $ 0.36 $ 0.32 $ 1.02 $ 0.96 Diluted earnings per share $ 0.35 $ 0.32 $ 1.01 $ 0.95 Basic weighted average common shares outstanding 9,932,060 9,613,386 9,824,984 9,567,294 Diluted weighted average common shares outstanding 10,026,588 9,692,290 9,909,019 9,639,122 ENTERPRISE BANCORP, INC. Selected Consolidated Financial Data and Ratios (unaudited) At or for the At or for the At or for the nine months year ended nine months (Dollars in thousands, ended September December 31, ended September except per share data) 30, 2013 2012 30, 2012 ----------------------- ---------------- ----------------- ---------------- BALANCE SHEET AND OTHER DATA Total assets $ 1,832,549 $ 1,665,726 $ 1,637,547 Loans serviced for others 73,571 75,854 74,529 Investment assets under management 638,159 592,355 578,918 ---------------- ----------------- ---------------- Total assets under management $ 2,544,279 $ 2,333,935 $ 2,290,994 ================ ================= ================ Book value per share $ 14.88 $ 14.42 $ 14.17 Dividends paid per common share $ 0.345 $ 0.440 $ 0.330 Total capital to risk weighted assets 11.41% 11.46% 11.57% Tier 1 capital to risk weighted assets 10.07% 10.15% 10.26% Tier 1 capital to average assets 8.55% 8.64% 8.58% Allowance for loan losses to total loans 1.77% 1.78% 1.84% Non-performing assets $ 20,012 $ 22,101 $ 24,561 Non-performing assets to total assets 1.09% 1.33% 1.50% INCOME STATEMENT DATA (annualized) Return on average total assets 0.78% 0.78% 0.78% Return on average stockholders' equity 9.36% 9.27% 9.25% Net interest margin (tax equivalent) 4.09% 4.27% 4.29% CONTACT: Mary Ellen Fitzpatrick, Senior Vice President, Corporate Communications (978) 656-5520
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