Enterprise Bancorp, Inc. Reports Its 86th Consecutive Profitable Quarter With First Quarter 2011 Earnings Of $2.5 Million.

Enterprise Bancorp, Inc. (the “Company”) (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the three months ended March 31, 2011 of $2.5 million, or $0.26 per diluted share, compared to $2.9 million, or $0.32 per diluted share, for the comparable 2010 period.

As previously announced on April 19, 2011, the Company declared a quarterly dividend of $0.105 per share to be paid on June 1, 2011 to shareholders of record as of May 11, 2011. The quarterly dividend represents a 5.0% increase over the 2010 dividend rate.

Chief Executive Officer Jack Clancy commented, “We are very pleased with our financial results and growth during the first quarter of 2011. Operating income was comparable to prior year levels, as the $422 thousand decrease in net income, compared to the same quarter in 2010, was primarily due to the level of gains realized in 2010 on sales of both investment securities and foreclosed real estate. The Company did not have sales of these assets in the 2011 period. Deposits, excluding brokered deposits, have grown $41.1 million, or 3%, since December 31, 2010, or 13% on an annualized basis. While many banks continue to experience declining loan portfolios, our loan balances grew $8.3 million, or 1%, since December 31, 2010, 3% on an annualized basis. During the first quarter, we opened our third Southern New Hampshire location in Hudson, and are very pleased with the reception we have received in the Hudson market.”

Mr. Clancy further stated, “In 2011, our focus remains on increasing market share and on growing all of our business lines, including quality lending, deposits, investment assets managed and insurance services through continued organic growth and strategic expansion, as we seek to take advantage of market opportunities that continue to be presented to strong community banks. We remain committed to making investments in our branch network, technology, and most importantly in our employees, customers and communities, while positioning the Bank for long-term growth.”

Founder and Chairman of the Board George Duncan stated, “Our employees have an unwavering commitment and focus on the communities and customers that we serve. Local businesses, professionals, non-profits and individuals continue to seek the flexibility, responsiveness and personalized service that a community bank such as Enterprise provides. As a strong, well-capitalized community bank with state-of-the-art product capabilities delivered with a local and dedicated customer-service focus, we believe that we are well positioned to meet our communities’ needs. It is because of our commitment to the markets in which we operate that we have recorded 86 consecutive quarters of profitability; our total assets under management now surpass $2 billion; and total earnings since the Bank’s inception exceed $100 million.”

Results of Operations

For the quarter ended March 31, 2011, the Company’s growth contributed to increases in net interest income and the level of operating expenses. The $422 thousand decrease in net income for the three months ended March 31, 2011, as compared to the same period in 2010, was primarily due to $501 thousand of gains on investment securities sales and approximately $110 thousand in gains on the sale of foreclosed real estate realized in 2010. The Company did not have sales of these assets in the 2011 period.

Net interest income for the quarter ended March 31, 2011 amounted to $14.0 million, an increase of $826 thousand, or 6%, compared to the March 2010 quarter. The increase in net interest income over the comparable 2010 period was due primarily to loan growth. For the three months ended March 31, 2011, average loan balances were $59.5 million higher than the same three months in 2010. Tax equivalent net interest margin, however, slightly decreased to 4.43%, as compared to 4.44% for the quarter ended March 31, 2010, but has increased since December 31, 2010 when the quarterly margin was 4.31%.

The provision for loan losses amounted to $922 thousand for the three months ended March 31, 2011 compared to $879 thousand for the same period in 2010. The provision for loan losses during any period is a function of the level of loan growth and trends in asset quality, taking into consideration net charge-offs, the level of non-performing and adversely classified loans, and reserves for specific impaired loans. Loan growth during the first quarter of 2011 amounted to $8.3 million compared to $8.4 million for the same period in 2010. For the year-to-date period ended March 31, 2011, the Company recorded net charge-offs of $64 thousand, compared to net charge-offs of $607 thousand for the comparable period ended March 31, 2010. Annualized net charge-offs to average loans for the three months ended March 31, 2011 amounted to 0.02% compared to 0.23% in 2010. Total non-performing assets to total assets were 1.67% at March 31, 2011, compared to 1.36% at March 31, 2010. Management continues to closely monitor the non-performing assets, charge-offs and necessary allowance levels, including specific reserves, and believes that current loan quality statistics are a function of the lagging effects of the recent economic environment. The allowance for loan losses to total loans ratio was 1.76% at March 31, 2011, compared to 1.70% at December 31, 2010 and 1.69% at March 31, 2010.

Non-interest income for the three months ended March 31, 2011 amounted to $2.8 million, a decrease of $311 thousand, or 10%, compared to the first quarter of 2010. The decrease in non-interest income in the current year primarily resulted from decreases in gains on sales of investment securities and gains on sales of foreclosed real estate, which is included in Other Income, partially offset by increases in gains on loan sales and investment advisory fees.

Non-interest expense for the three months ended March 31, 2011, amounted to $12.2 million, an increase of $1.1 million, or 10%, compared to the same period in the prior year. We continue to expand the branch network and invest in our infrastructure, communities, and employees to position Enterprise for continued long-term growth. These efforts resulted in general increases in non-interest expense including compensation-related costs, technology, and advertising and philanthropic costs. Occupancy expense also increased over the prior year as a result of the unusually harsh weather conditions in New England in the first quarter of 2011.

Key Financial Highlights

  • Total assets were $1.43 billion at March 31, 2011 as compared to $1.40 billion at December 31, 2010, an increase of 2%.
  • Total loans amounted to $1.15 billion at March 31, 2011, an increase of $8.3 million, or 1%, since December 31, 2010. This increase was comprised of a $13.4 million increase in commercial loan balances, partially offset by a decrease of $5.1 million in consumer loans (including residential mortgages) primarily due to residential loan sales in the first quarter.
  • Total deposits, excluding brokered deposits, were $1.29 billion at March 31, 2011 as compared to $1.24 billion at December 31, 2010, an increase of 3%. Brokered deposit balances were minimal on those respective dates.
  • Investment assets under management amounted to $508.3 million at March 31, 2011 as compared to $493.1 million at December 31, 2010, an increase of 3%. The increase is attributable primarily to asset growth, both from new business and market value appreciation.
  • Total assets under management amounted to $2.00 billion at March 31, 2011 as compared to $1.95 billion at December 31, 2010, an increase of 2%.

Enterprise Bancorp, Inc. (the “Company”), 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 86 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 management, trust 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 eighteen full-service branch offices located in the Massachusetts cities and towns of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Leominster, Methuen, Tewksbury, and Westford and in the New Hampshire towns of Derry, Hudson, and Salem.

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 the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “will,” “should,” and other expressions that predict or indicate future events or trends and which do not relate to historical matters. 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 Statements of Income

Three months ended March 31, 2011 and 2010

(unaudited)
     

Three Months Ended March 31,
(Dollars in thousands, except per share data)   2011   2010
 
Interest and dividend income:
Loans $ 15,270 $ 14,769
Investment securities 959 1,090
Short-term investments   11   6
Total interest and dividend income   16,240   15,865
 
Interest expense:
Deposits 1,915 2,331
Borrowed funds 22 57
Junior subordinated debentures   294   294
Total interest expense   2,231   2,682
 
Net interest income 14,009 13,183
 
Provision for loan losses   922   879
Net interest income after provision for loan losses
  13,087   12,304
 
Non-interest income:
Investment advisory fees 956 854
Deposit service fees 1,023 972
Income on bank-owned life insurance 162 156
Other than temporary impairment on investment securities - (1 )
Net gains on sales of investment securities - 501
Gains on sales of loans 220 81
Other income   419   528
Total non-interest income   2,780   3,091
 
Non-interest expense:
Salaries and employee benefits 6,976 6,446
Occupancy and equipment expenses 1,444 1,307
Technology and telecommunications expenses 973 912
Advertising and public relations expenses 665 526
Deposit insurance premiums 489 460
Audit, legal and other professional fees 310 267
Supplies and postage expenses 218 196
Investment advisory and custodial expenses 104 136
Other operating expenses   1,021   883
Total non-interest expense   12,200   11,133
 
Income before income taxes 3,667 4,262
Provision for income taxes   1,203   1,376
 
Net income $ 2,464 $ 2,886
 
Basic earnings per share $ 0.26 $ 0.32
 
Diluted earnings per share $ 0.26 $ 0.32
 
Basic weighted average common shares outstanding   9,317,240   9,124,696
 
Diluted weighted average common shares outstanding   9,355,197   9,129,024
 

ENTERPRISE BANCORP, INC.

Consolidated Balance Sheets

(unaudited)
         
March 31, December 31, March 31,
(Dollars in thousands)   2011   2010   2010
 
Assets
Cash and cash equivalents:
Cash and due from banks $ 26,071 $ 30,541 $ 23,711
Short-term investments   61,094   24,465   61,279
Total cash and cash equivalents   87,165   55,006   84,990
 
Investment securities at fair value 138,949 146,800 139,870

Loans, less allowance for loan losses of $20,273 at March 31, 2011, $19,415 at December 31, 2010 and $18,490 at March 31, 2010, respectively
1,131,381 1,123,931 1,072,721
Premises and equipment 25,525 24,924 23,168
Accrued interest receivable 5,669 5,532 5,558
Deferred income taxes, net 10,911 11,039 10,253
Bank-owned life insurance 14,535 14,397 13,971
Prepaid income taxes - 379 -
Prepaid expenses and other assets 9,635 9,657 9,806
Core deposit intangible, net of amortization - - 43
Goodwill   5,656   5,656   5,656
 
Total assets $ 1,429,426 $ 1,397,321 $ 1,366,036
 
Liabilities and Stockholders’ Equity
 
Liabilities
Deposits $ 1,285,046 $ 1,244,071 $ 1,188,201
Borrowed funds 5,542 15,541 45,301
Junior subordinated debentures 10,825 10,825 10,825
Accrued expenses and other liabilities 8,077 9,297 10,080
Income taxes payable 269 - 454
Accrued interest payable   562   914   726
 
Total liabilities   1,310,321   1,280,648   1,255,587
 
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; 9,380,747, 9,290,465, and 9,210,026 shares issued and outstanding at March 31, 2011, December 31, 2010 and March 31, 2010, respectively
 
94 93 92
Additional paid-in capital 43,285 42,590 41,099
Retained earnings 73,487 72,000 67,017
Accumulated other comprehensive income   2,239   1,990   2,241
 
Total stockholders’ equity   119,105   116,673   110,449
 
Total liabilities and stockholders’ equity $ 1,429,426 $ 1,397,321 $ 1,366,036
 

ENTERPRISE BANCORP, INC.

Selected Consolidated Financial Data and Ratios

(unaudited)
         
At or for the At or for the At or for the
three months year three months
ended ended ended
March 31, December 31, March 31,
(Dollars in thousands, except per share data)     2011       2010   2010
Balance Sheet Items:
Total assets $ 1,429,426 $ 1,397,321 $ 1,366,036
Loans serviced for others 63,540 63,807 59,977
Investment assets under management   508,265     493,078     448,186  
Total assets under management $ 2,001,231   $ 1,954,206   $ 1,874,199  
 
Book value per share $ 12.70 $ 12.56 $ 11.99
Dividends per common share $ 0.105 $ 0.400 $ 0.100
Total capital to risk weighted assets 11.40 % 11.44 % 11.18 %
Tier 1 capital to risk weighted assets 10.09 % 10.14 % 9.88 %
Tier 1 capital to average assets 8.79 % 8.55 % 8.66 %
Allowance for loan losses to total loans 1.76 % 1.70 % 1.69 %
Non-performing assets $ 23,908 $ 21,166 $ 18,618
Non-performing assets to total assets 1.67 % 1.51 % 1.36 %
 
Income Statement Items (annualized):
Return on average assets 0.72 % 0.78 % 0.89 %
Return on average stockholders’ equity 8.49 % 9.42 % 10.73 %
Net interest margin (tax equivalent) 4.43 % 4.41 % 4.44 %

Copyright Business Wire 2010

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