Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank,
announced net income for the three months ended December 31, 2021,
of $10.8 million, or $0.90 per diluted common share, compared to
$9.9 million, or $0.82 per diluted common share, for the three
months ended December 31, 2020. Net income for the year ended
December 31, 2021, amounted to $42.2 million, or
$3.50 per diluted common share, compared to $31.5 million, or $2.64
per diluted common share, for the year
ended December 31, 2020.
As previously announced on January 18, 2022, the
Company declared a quarterly dividend of $0.205 per common share to
be paid on March 1, 2022, to shareholders of record as of
February 8, 2022.
Chief Executive Officer Jack Clancy commented, "We ended our
33rd year of operations financially strong and well positioned in
our markets. Our financial results for the fourth quarter and year
to date 2021 were solid with increases of 10% and 34% in net income
over the comparable prior year periods. Our operating results were
substantially impacted by PPP income, which amounted to $19.7
million in 2021, compared to $10.7 million in 2020, and a decrease
in the provision for credit losses, which amounted to $1.8 million
in 2021, compared to $12.5 million in 2020."
Mr. Clancy continued, "Shifting to our balance sheet, we
experienced strong loan growth, excluding PPP loans, ("core loans,"
non-GAAP) in 2021 of $218.4 million, or 8%, with growth
concentrated in the fourth quarter when core loans (non-GAAP)
increased by $149.3 million, or 6%. Growth in core loans (non-GAAP)
was largely in our commercial real estate portfolio and reflected
our strong business development efforts."
Mr. Clancy further noted, "During the quarter, we continued to
experience high liquidity primarily from significant customer
deposit growth of $504.0 million, or 14%, for 2021 and from $587.0
million in funds received for PPP loan forgiveness during 2021. We
have continued to manage our high liquidity by making considerable
investments in our bond portfolio. Total investment securities at
fair value amounted to $958.2 million at December 31, 2021, an
increase of $375.2 million, or 64%, from December 31, 2020.
The increase during the fourth quarter was $139.0 million, or
17%."
Executive Chairman & Founder George Duncan commented, "In
November of 2021, we were recognized by the Boston Globe for our
deep commitment to our team members. Enterprise Bank ranked 4th on
the Boston Globe's Top Places to Work ("TPTW") list among large
sized companies in Massachusetts. This was our fifth consecutive
year in the top five and our tenth consecutive year on the TPTW
list. I want to personally thank and commend our entire dedicated
team for their continual efforts in fostering an employee-centric
culture whose foundation is based on respect, trust, care, personal
accountability and excellence."
Construction of our 27th branch, which will be in Londonderry,
New Hampshire, is progressing well and an opening in the third
quarter of 2022 is anticipated. We also expect to complete our
Lexington, Massachusetts branch relocation in March 2022, to a
larger more convenient downtown location.
Net Income
Net income for the quarter and year ended December 31,
2021, amounted to $10.8 million, an increase of $1.0 million,
or 10%, and $42.2 million, an increase of $10.7 million, or
34%, compared to the respective prior year periods.
- The quarter-to-date increase in net
income was attributable primarily to increases in net interest
income and non-interest income of $1.5 million and $1.3 million,
respectively, and a decrease in the provision for credit losses of
$1.1 million, partially offset by an increase in non-interest
expense of $3.0 million.
- The year-to-date increase in net
income was attributable largely to an increase in net interest
income of $11.4 million, and a decrease in the provision for credit
losses of $10.7 million, partially offset by an increase in
non-interest expense of $8.9 million.
- Year-to-date non-interest income results, which are reviewed
below, increased $860 thousand, or 5% over the prior year
period and were impacted by non-recurring items related to a gain
on sale of an other real estate owned ("OREO") property and the
early termination of interest rate swaps.
Net Interest Income
Net interest income for the quarter and year ended
December 31, 2021, amounted to $35.7 million, an increase of
$1.5 million, or 4%, and $141.6 million, an increase of $11.4
million, or 9%, compared to the respective prior year periods.
- The quarter-to-date increase in net
interest income was due largely to increases in core loan income
(non-GAAP) of $349 thousand, investment security income of
$1.2 million and a decrease in deposit interest expense of
$1.1 million, partially offset by a decrease in PPP income of
$1.5 million.
- The year-to-date increase in net
interest income was due largely to an increase in PPP income of
$9.0 million and a decrease in deposit interest expense of
$7.7 million, partially offset by a decrease in core loan
income (non-GAAP) of $6.9 million.
- Net interest income included PPP income of $3.2 million and
$19.7 million for the quarter and year ended December 31,
2021, compared to $4.8 million and $10.7 million for the respective
prior year periods.
Net Interest Margin
Tax equivalent net interest margin ("net interest margin" or
"margin") was 3.34% and 3.49% for the quarters ended
December 31, 2021, and 2020, respectively. Margin was 3.44%
and 3.59% for the years ended December 31, 2021, and 2020,
respectively.
Margin has been negatively impacted by large balances in
lower-yielding interest-earning deposits with banks, and to a
lesser extent, loan pay-downs, new loan originations, investment
purchases and lower interest yields, partially offset by PPP
income.
For the quarters ended December 31, 2021, and 2020:
- Average interest-earning deposits
with banks amounted to $531.5 million and $303.7 million.
- Average PPP loan balances, net of
deferred SBA fees, amounted to $104.3 million and $481.0
million.
- Adjusted net interest margin (non-GAAP) was 3.56% and
3.76%.
For the years ended December 31, 2021, and 2020:
- Average interest-earning deposits
with banks amounted to $499.1 million and $186.0 million.
- Average PPP loan balances, net of
deferred SBA fees, amounted to $297.0 million and $336.5
million.
- Adjusted net interest margin (non-GAAP) was 3.65% and
3.84%.
Provision for Credit Losses
The provision for credit losses for the quarter and year ended
December 31, 2021, amounted to $1.0 million and $1.8 million,
decreases of $1.1 million and $10.7 million, compared to the
respective prior year periods.
- The provision for the quarter and
year ended December 31, 2021, resulted primarily from core
loan growth (non-GAAP) and an increase in reserves for unfunded
commitments (included in other liabilities), partially offset by a
reduction in loan loss reserve factors and declines in reserves for
individually evaluated loans.
- The provision in the prior year periods reflected increases in
reserves primarily related to the estimated impact of the COVID-19
pandemic on the credit quality of the loan portfolio at
December 31, 2020, and increases in reserves for individually
evaluated loans.
Non-Interest Income
Non-interest income for the quarter and year ended
December 31, 2021, amounted to $6.0 million, an increase of
$1.3 million, or 27%, and $18.1 million, an increase of
$860 thousand, or 5%, compared to the respective prior year
periods.
- The quarter-to-date increase in
non-interest income resulted primarily from a gain on sale of OREO
of $1.1 million and increases in deposit and interchange fees of
$279 thousand and wealth management fees of
$209 thousand, partially offset by a decrease in net gains on
sales of loans of $557 thousand, resulting largely from the
Company holding more residential loan production in the loan
portfolio.
- The year-to-date increase in non-interest income resulted
primarily from increases in wealth management fees of $1.0 million,
deposit and interchange fees of $545 thousand, gain on sale of
OREO of $1.1 million and equity securities market value gains of
$290 thousand which are included in other income, partially
offset by a $1.8 million loss on the early termination of
$75.0 million in interest-rate swaps, realized in the third quarter
of 2021 and a decrease in net gains on sales of loans of
$576 thousand, resulting largely from lower origination volume
and the Company holding more residential loan production in the
loan portfolio.
Non-Interest Expense
Non-interest expense for the quarter and year ended
December 31, 2021, amounted to $26.5 million, an increase of
$3.0 million, or 13%, and $102.1 million, an increase of $8.9
million, or 10%, compared to the respective prior year periods and
due primarily to the Company's long-term growth and technology
initiatives.
- The quarter-to-date increase in
non-interest expense resulted primarily from increases in salaries
and employee benefits of $1.9 million, technology and
telecommunications of $315 thousand, and occupancy and
equipment of $193 thousand.
- The year-to-date increase in
non-interest expense resulted primarily from increases in salaries
and employee benefits of $5.1 million, occupancy and equipment
of $1.1 million, technology and telecommunications of
$1.4 million, and a loss on the redemption of subordinated
debt of $713 thousand.
- The current quarter and year-to-date results were impacted by
increases of $932 thousand and $3.2 million,
respectively, related to the Company's bank-wide variable
compensation and performance incentive plans, which are included in
salary and employee benefits. Excluding these increases,
non-interest expense for the quarter and year-to date periods
increased 10% and 6% over the respective prior year periods.
Adoption of CECL
In the first quarter of 2021, the Company adopted the Financial
Accounting Standards Board's guidance related to measuring credit
losses, including the current expected credit losses ("CECL")
methodology for estimating the allowance for credit losses ("ACL").
The CECL methodology requires earlier recognition of credit losses
using a lifetime credit loss measurement approach that also
requires the consideration of reasonable and supportable forecasts
in the estimate.
The adoption of CECL resulted in the Company recording a net
cumulative-effect adjustment, effective January 1, 2021, that
decreased retained earnings by $6.5 million, net of $2.5 million in
deferred income taxes. The ACL for loans increased by $6.6 million
and the reserve for unfunded commitments (included in other
liabilities) increased by $2.4 million.
Asset Quality
The ACL for loans amounted to $47.7 million, or 1.63% of total
loans or 1.67% of total core loans (non-GAAP), at December 31,
2021, compared to $44.6 million, or 1.45% of total loans or 1.69%
of total core loans (non-GAAP), at December 31, 2020. The
reserve for unfunded commitments (included in other liabilities)
amounted to $3.7 million at December 31, 2021.
Charge-offs and recoveries for the quarter and year ended
December 31, 2021, amounted to net recoveries of
$108 thousand and net charge-offs of $4.0 million, compared to
net charge-offs of $1.4 million and $1.5 million for the
respective prior year periods. Net charge-offs for the year ended
December 31, 2021, related primarily to two individually
evaluated commercial loans, which were fully reserved for prior to
2021.
Non-performing assets amounted to $26.6 million, or 0.60% of
total assets, at December 31, 2021, compared to $38.1 million,
or 0.95% of total assets, at December 31, 2020.
- The decrease in non-performing assets was due to the partial
charge-off of two commercial relationships, as well as principal
pay-downs and credit upgrades, partially offset by additional
downgrades. One of the charge-offs related to a commercial office
building that was reclassified to OREO in April 2021 and sold in
October 2021. The property sold was the Company’s only OREO asset
during the years ended December 31, 2021, and 2020.
Balance Sheet
Total assets amounted to $4.45 billion at December 31,
2021, compared to $4.01 billion at December 31, 2020, an
increase of $433.5 million, or 11%. The increase related primarily
to increases in interest-earning deposits with banks, investments
and core loans (non-GAAP), partially offset by a decrease in PPP
loans.
Total interest-earning deposits with banks amounted to $403.0
million at December 31, 2021, compared to $213.1 million at
December 31, 2020. The increase resulted primarily from
increases in customer deposits and PPP loan forgiveness payments
received from the SBA. Excess liquidity was partially utilized to
fund growth in the Company's investment security portfolio and core
loan (non-GAAP) growth, particularly during the third and fourth
quarters of 2021.
Total investments amounted to $958.2 million at
December 31, 2021, compared to $583.0 million at
December 31, 2020, an increase of $375.2 million, or 64%. The
increase resulted primarily from purchases of $211.4 million and
$190.6 million during the third and fourth quarters of 2021.
Total loans amounted to $2.92 billion at December 31, 2021,
compared to $3.07 billion at December 31, 2020, a decrease of
$153.2 million, or 5%.
- As of
December 31, 2021, the Company had 396 PPP loans outstanding
with a principal balance of $73.9 million and deferred SBA fees of
$2.4 million compared to 2,633 PPP loans outstanding with a
principal balance of $453.1 million and deferred SBA fees of $10.0
million at December 31, 2020.
- During the year ended December 31, 2021, PPP forgiveness
payments received from the SBA amounted to $587.0 million and round
three PPP loan originations, which ended in May 2021, amounted to
$207.8 million.
Total core loans (non-GAAP) amounted to $2.85 billion at
December 31, 2021, an increase of $218.4 million, or 8%,
compared to December 31, 2020. Core loans (non-GAAP) increased
$149.3 million, or 6%, during the fourth quarter of 2021.
Customer deposits amounted to $3.98 billion at December 31,
2021, compared to $3.48 billion at December 31, 2020, an
increase of $504.0 million, or 14%. Of the year-to-date increase in
customer deposits, $9.3 million was experienced during the fourth
quarter of 2021.
Wealth assets under management, which are not carried as assets
on the Company's consolidated balance sheets, amounted to $1.04
billion at December 31, 2021, compared to $976.5 million at
December 31, 2020, an increase of $64.9 million, or 7%.
Capital
The Total Capital and Tier 1 Capital to risk weighted asset
ratios were 13.73% and 10.62%, respectively, at December 31,
2021 compared to 14.62% and 10.77%, respectively, at
December 31, 2020. The Company's December 31, 2021
capital ratios have been impacted by the following since
December 31, 2020:
- The redemption of $15.0 million of
fixed-to-floating rate subordinated notes in the first quarter of
2021, which were classified as Tier 2 capital. Tier 1 capital was
not impacted by the redemption.
- The adoption of CECL in the first
quarter of 2021, which resulted in a $6.5 million deduction from
capital.
- Growth in 2021 in total investments and total core loans
(non-GAAP), which require higher capital reserves than
interest-earning deposits with banks.
Non-GAAP Measures
Throughout this press release we have noted certain balances,
ratios or other measures of the Company’s performance which exclude
the impact of PPP loans, which we expect to be short-term in
nature. We refer to any balance, ratio or measure that excludes PPP
loans as "core." In addition, we refer to any balance, ratio or
measure that excludes PPP loans and interest-earning deposits with
banks as "adjusted." The core and adjusted balances, ratios and
measures were derived in order to provide more meaningful
comparisons to prior periods as: (1) PPP loans outstanding have
been originated within the last 21 months and the majority are
expected to pay off during the next several quarters; and (2)
growth in customer deposits and PPP loan forgiveness have led to
temporarily high liquidity, carried as lower-yielding
interest-earning deposits with banks, compared to prior periods.
The tables beginning on page 10 provide a reconciliation of the
non-GAAP measures to the information presented under U.S. generally
accepted accounting principles ("GAAP").
About Enterprise Bancorp, Inc.
Enterprise Bancorp, Inc. is a Massachusetts corporation that
conducts substantially all its operations through Enterprise Bank
and Trust Company, commonly referred to as Enterprise Bank, and has
reported 129 consecutive profitable quarters. 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, 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 Northern Middlesex, Northern Essex, and Northern
Worcester counties of Massachusetts and the Southern Hillsborough
and Southern Rockingham counties in New Hampshire. Enterprise Bank
has 26 full-service branches located in the Massachusetts
communities of Acton, Andover, Billerica (2), Chelmsford (2),
Dracut, Fitchburg, Lawrence, Leominster, Lexington, Lowell (2),
Methuen, North Andover, Tewksbury (2), Tyngsborough and Westford
and in the New Hampshire communities of Derry, Hudson, Nashua (2),
Pelham, Salem and Windham. The Company is in the process of
constructing a branch office in Londonderry, New Hampshire and
anticipates that this location will open in the third quarter of
2022.
Forward-Looking Statements
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 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
ongoing COVID-19 pandemic and any current or future variants of,
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, changes in tax laws,
and current or future litigation, regulatory examinations or other
legal and/or regulatory actions, including as a result of our
participation in and execution of government programs related to
the COVID-19 pandemic and any current or future variants of.
Therefore, the Company can give no assurance that the results
contemplated in the forward-looking statements will be realized and
readers are cautioned not to place undue reliance on the
forward-looking statements contained in this press release. For
more information about these factors, please see our reports filed
with or furnished to the U.S. Securities and Exchange Commission
(the "SEC"), including our most recent Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q 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, except per share
data) |
December 31,2021 |
|
December 31,2020 |
Assets |
|
|
|
Cash and cash equivalents: |
|
|
|
Cash and due from banks |
$ |
33,572 |
|
|
$ |
40,636 |
|
Interest-earning deposits with banks |
|
403,004 |
|
|
|
213,146 |
|
Total cash and cash equivalents |
|
436,576 |
|
|
|
253,782 |
|
Investments: |
|
|
|
Debt securities at fair value (amortized cost of $950,523 and
$551,191 respectively) |
|
956,430 |
|
|
|
582,303 |
|
Equity securities at fair value |
|
1,785 |
|
|
|
746 |
|
Total investment securities at fair value |
|
958,215 |
|
|
|
583,049 |
|
Federal Home Loan Bank stock |
|
2,164 |
|
|
|
1,905 |
|
Loans held for sale |
|
— |
|
|
|
371 |
|
Loans: |
|
|
|
Total loans |
|
2,920,684 |
|
|
|
3,073,860 |
|
Allowance for credit losses |
|
(47,704 |
) |
|
|
(44,565 |
) |
Net loans |
|
2,872,980 |
|
|
|
3,029,295 |
|
Premises and equipment, net |
|
44,689 |
|
|
|
46,708 |
|
Lease right-of-use asset |
|
24,295 |
|
|
|
18,439 |
|
Accrued interest receivable |
|
13,354 |
|
|
|
16,079 |
|
Deferred income taxes, net |
|
19,644 |
|
|
|
11,290 |
|
Bank-owned life insurance |
|
62,954 |
|
|
|
31,363 |
|
Prepaid income taxes |
|
279 |
|
|
|
2,449 |
|
Prepaid expenses and other assets |
|
7,013 |
|
|
|
13,938 |
|
Goodwill |
|
5,656 |
|
|
|
5,656 |
|
Total assets |
$ |
4,447,819 |
|
|
$ |
4,014,324 |
|
Liabilities and Stockholders’
Equity |
|
|
|
Liabilities |
|
|
|
Deposits: |
|
|
|
Customer deposits |
$ |
3,980,239 |
|
|
$ |
3,476,268 |
|
Brokered deposits |
|
— |
|
|
|
74,995 |
|
Total deposits |
|
3,980,239 |
|
|
|
3,551,263 |
|
Borrowed funds |
|
5,479 |
|
|
|
4,774 |
|
Subordinated debt |
|
58,979 |
|
|
|
73,744 |
|
Lease liability |
|
23,627 |
|
|
|
17,539 |
|
Accrued expenses and other liabilities |
|
31,063 |
|
|
|
30,638 |
|
Accrued interest payable |
|
1,537 |
|
|
|
1,940 |
|
Total liabilities |
|
4,100,924 |
|
|
|
3,679,898 |
|
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; 12,038,382 and 11,937,795 shares issued and
outstanding, respectively |
|
120 |
|
|
|
119 |
|
Additional paid-in capital |
|
100,352 |
|
|
|
97,137 |
|
Retained earnings |
|
241,761 |
|
|
|
214,977 |
|
Accumulated other comprehensive income |
|
4,662 |
|
|
|
22,193 |
|
Total stockholders’ equity |
|
346,895 |
|
|
|
334,426 |
|
Total liabilities and stockholders’ equity |
$ |
4,447,819 |
|
|
$ |
4,014,324 |
|
ENTERPRISE
BANCORP, INC.Consolidated Statements of
Income(unaudited)
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
(Dollars in thousands, except per share data) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
2020 |
Interest and dividend income: |
|
|
|
|
|
|
|
Loans and loans held for sale |
$ |
32,478 |
|
$ |
33,619 |
|
$ |
133,208 |
|
|
$ |
131,091 |
Investment securities |
|
4,428 |
|
|
3,254 |
|
|
15,143 |
|
|
|
13,347 |
Other interest-earning assets |
|
211 |
|
|
87 |
|
|
682 |
|
|
|
402 |
Total interest and dividend income |
|
37,117 |
|
|
36,960 |
|
|
149,033 |
|
|
|
144,840 |
Interest expense: |
|
|
|
|
|
|
|
Deposits |
|
627 |
|
|
1,743 |
|
|
3,922 |
|
|
|
11,599 |
Borrowed funds |
|
17 |
|
|
3 |
|
|
60 |
|
|
|
606 |
Subordinated debt |
|
818 |
|
|
1,033 |
|
|
3,495 |
|
|
|
2,501 |
Total interest expense |
|
1,462 |
|
|
2,779 |
|
|
7,477 |
|
|
|
14,706 |
Net interest income |
|
35,655 |
|
|
34,181 |
|
|
141,556 |
|
|
|
130,134 |
Provision for credit
losses |
|
1,023 |
|
|
2,102 |
|
|
1,770 |
|
|
|
12,499 |
Net interest income after provision for credit losses |
|
34,632 |
|
|
32,079 |
|
|
139,786 |
|
|
|
117,635 |
Non-interest income: |
|
|
|
|
|
|
|
Wealth management fees |
|
1,769 |
|
|
1,560 |
|
|
6,787 |
|
|
|
5,815 |
Deposit and interchange fees |
|
1,901 |
|
|
1,622 |
|
|
6,971 |
|
|
|
6,426 |
Income on bank-owned life insurance, net |
|
303 |
|
|
141 |
|
|
821 |
|
|
|
587 |
Net gains on sales of debt securities |
|
— |
|
|
— |
|
|
128 |
|
|
|
227 |
Net gains on sales of loans |
|
38 |
|
|
595 |
|
|
833 |
|
|
|
1,409 |
Net gain on sale of OREO |
|
1,126 |
|
|
— |
|
|
1,126 |
|
|
|
— |
Loss on termination of swaps |
|
— |
|
|
— |
|
|
(1,847 |
) |
|
|
— |
Other income |
|
840 |
|
|
797 |
|
|
3,288 |
|
|
|
2,783 |
Total non-interest income |
|
5,977 |
|
|
4,715 |
|
|
18,107 |
|
|
|
17,247 |
Non-interest expense: |
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,256 |
|
|
15,313 |
|
|
66,633 |
|
|
|
61,580 |
Occupancy and equipment expenses |
|
2,382 |
|
|
2,189 |
|
|
9,650 |
|
|
|
8,546 |
Technology and telecommunications expenses |
|
2,697 |
|
|
2,382 |
|
|
10,574 |
|
|
|
9,197 |
Advertising and public relations expenses |
|
771 |
|
|
645 |
|
|
2,373 |
|
|
|
2,151 |
Audit, legal and other professional fees |
|
645 |
|
|
558 |
|
|
2,347 |
|
|
|
2,273 |
Deposit insurance premiums |
|
583 |
|
|
434 |
|
|
1,910 |
|
|
|
2,124 |
Supplies and postage expenses |
|
214 |
|
|
223 |
|
|
819 |
|
|
|
898 |
Loss on extinguishment of subordinated debt |
|
— |
|
|
— |
|
|
713 |
|
|
|
— |
Other operating expenses |
|
1,978 |
|
|
1,733 |
|
|
7,116 |
|
|
|
6,485 |
Total non-interest expense |
|
26,526 |
|
|
23,477 |
|
|
102,135 |
|
|
|
93,254 |
Income before income
taxes |
|
14,083 |
|
|
13,317 |
|
|
55,758 |
|
|
|
41,628 |
Provision for income
taxes |
|
3,235 |
|
|
3,460 |
|
|
13,587 |
|
|
|
10,172 |
Net income |
$ |
10,848 |
|
$ |
9,857 |
|
$ |
42,171 |
|
|
$ |
31,456 |
|
|
|
|
|
|
|
|
Basic earnings per common
share |
$ |
0.90 |
|
$ |
0.83 |
|
$ |
3.51 |
|
|
$ |
2.64 |
Diluted earnings per common
share |
$ |
0.90 |
|
$ |
0.82 |
|
$ |
3.50 |
|
|
$ |
2.64 |
|
|
|
|
|
|
|
|
Basic weighted average common
shares outstanding |
|
12,031,471 |
|
|
11,930,578 |
|
|
12,005,838 |
|
|
|
11,897,813 |
Diluted weighted average
common shares outstanding |
|
12,093,097 |
|
|
11,951,882 |
|
|
12,051,293 |
|
|
|
11,919,508 |
ENTERPRISE
BANCORP, INC.Selected Consolidated Financial Data and
Ratios(unaudited)
|
|
At or for the year ended |
|
At or for theyear ended |
(Dollars in thousands, except per share
data) |
|
December 31,2021 |
|
December 31,2020 |
ASSET DATA |
|
|
|
|
Total assets |
|
$ |
4,447,819 |
|
|
$ |
4,014,324 |
|
Wealth assets under
management |
|
|
1,041,409 |
|
|
|
976,502 |
|
Total assets under management
(non-GAAP) |
|
$ |
5,489,228 |
|
|
$ |
4,990,826 |
|
|
|
|
|
|
INCOME STATEMENT
RATIOS |
|
|
|
|
Return on average total
assets |
|
|
0.98 |
% |
|
|
0.82 |
% |
Return on average
stockholders’ equity |
|
|
12.49 |
% |
|
|
9.95 |
% |
Net interest margin
(tax-equivalent)(1) |
|
|
3.44 |
% |
|
|
3.59 |
% |
|
|
|
|
|
STOCKHOLDERS' EQUITY
RATIOS |
|
|
|
|
Book value per common
share |
|
$ |
28.82 |
|
|
$ |
28.01 |
|
Dividends paid per common
share |
|
$ |
0.74 |
|
|
$ |
0.70 |
|
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
Total capital to risk weighted
assets |
|
|
13.73 |
% |
|
|
14.62 |
% |
Tier 1 capital to risk
weighted assets(2) |
|
|
10.62 |
% |
|
|
10.77 |
% |
Tier 1 capital to average
assets |
|
|
7.56 |
% |
|
|
7.52 |
% |
|
|
|
|
|
CREDIT QUALITY
DATA |
|
|
|
|
Non-performing loans |
|
$ |
26,581 |
|
|
$ |
38,050 |
|
Non-performing assets |
|
$ |
26,581 |
|
|
$ |
38,050 |
|
|
|
|
|
|
Non-performing loans to total
loans |
|
|
0.91 |
% |
|
|
1.24 |
% |
Non-performing loans to total core loans (non-GAAP)(3) |
|
|
0.93 |
% |
|
|
1.45 |
% |
|
|
|
|
|
Non-performing assets to total
assets |
|
|
0.60 |
% |
|
|
0.95 |
% |
Non-performing assets to total core assets (non-GAAP)(3) |
|
|
0.61 |
% |
|
|
1.07 |
% |
|
|
|
|
|
Allowance for credit losses to
total loans |
|
|
1.63 |
% |
|
|
1.45 |
% |
Allowance for credit losses to total core loans (non-GAAP)(3) |
|
|
1.67 |
% |
|
|
1.69 |
% |
|
(1) |
|
Tax equivalent net interest margin is net interest income adjusted
for the tax equivalent effect associated with tax-exempt loan and
investment income, expressed as a percentage of average
interest-earning assets. |
|
(2) |
|
Ratio also represents common
equity tier 1 capital to risk weighted assets as of December 31 of
the years presented. |
|
(3) |
|
See non-GAAP measures table below
for PPP-adjusted balances referred to as core. |
ENTERPRISE
BANCORP, INC.Selected Consolidated Financial Data and
Ratios (continued)(unaudited)
NON-GAAP MEASURES
The accompanying unaudited consolidated interim financial
statements have been prepared in accordance with GAAP. However,
certain financial measures and ratios we present are supplemental
measures that are not required by or are not presented in
accordance with GAAP. These non-GAAP measures are intended to
provide the reader with additional supplemental perspectives on
operating results, performance trends, and financial condition.
Non-GAAP financial measures are not a substitute for GAAP measures;
they should be read and used in conjunction with the Company’s GAAP
financial information. In addition, the non-GAAP financial measures
we present may differ from non-GAAP financial measures used by our
peers or other companies.
The following tables summarize the reconciliation of GAAP to
non-GAAP measures related to the impact of PPP loans on total loans
and loan interest income:
(Dollars in thousands) |
|
December 31,2021 |
|
December 31,2020 |
TOTAL CORE LOANS |
|
|
|
|
Total loans |
|
$ |
2,920,684 |
|
|
$ |
3,073,860 |
|
Adjustment: PPP loans |
|
|
(73,885 |
) |
|
|
(453,084 |
) |
Adjustment: Deferred PPP
fees |
|
|
2,383 |
|
|
|
10,014 |
|
Total core loans
(non-GAAP) |
|
$ |
2,849,182 |
|
|
$ |
2,630,790 |
|
|
|
Three months ended |
|
|
December 31, |
(Dollars in thousands) |
|
|
2021 |
|
|
|
2020 |
|
CORE LOAN INCOME |
|
|
|
|
Loan income |
|
$ |
32,478 |
|
|
$ |
33,619 |
|
Adjustment: PPP income |
|
|
(3,195 |
) |
|
|
(4,685 |
) |
Core loan income
(non-GAAP) |
|
$ |
29,283 |
|
|
$ |
28,934 |
|
|
|
Year ended |
|
|
December 31, |
(Dollars in thousands) |
|
|
2021 |
|
|
|
2020 |
|
CORE LOAN INCOME |
|
|
|
|
Loan income |
|
$ |
133,208 |
|
|
$ |
131,091 |
|
Adjustment: PPP income |
|
|
(19,691 |
) |
|
|
(10,675 |
) |
Core loan income
(non-GAAP) |
|
$ |
113,517 |
|
|
$ |
120,416 |
|
ENTERPRISE
BANCORP, INC.Selected Consolidated Financial Data and
Ratios (continued)(unaudited)
The following tables summarize the reconciliation of GAAP to
non-GAAP measures related to the impact of PPP loans and
interest-earning deposits with banks on net interest margin:
|
|
Three months ended |
|
Three months ended |
(Dollars in thousands) |
|
December 31,2021 |
|
December 31,2020 |
ADJUSTED INTEREST-EARNING ASSETS |
|
|
|
|
Total average interest-earning assets |
|
$ |
4,277,980 |
|
|
$ |
3,940,679 |
|
Adjustment: Average PPP loans,
net |
|
|
(104,287 |
) |
|
|
(481,012 |
) |
Adjustment: Average
interest-earning deposits with banks |
|
|
(531,489 |
) |
|
|
(303,745 |
) |
Total adjusted average
interest-earning assets (non-GAAP) |
|
$ |
3,642,204 |
|
|
$ |
3,155,922 |
|
|
|
|
|
|
ADJUSTED NET INTEREST
INCOME |
|
|
|
|
Net interest income (tax
equivalent) |
|
$ |
36,002 |
|
|
$ |
34,535 |
|
Adjustment: PPP income |
|
|
(3,195 |
) |
|
|
(4,685 |
) |
Adjustment: Interest on
interest-earning deposits with banks |
|
|
(197 |
) |
|
|
(71 |
) |
Adjusted net interest income
(tax equivalent) (non-GAAP) |
|
$ |
32,610 |
|
|
$ |
29,779 |
|
|
|
|
|
|
ADJUSTED NET INTEREST
MARGIN |
|
|
|
|
Net interest margin (tax
equivalent) |
|
|
3.34 |
% |
|
|
3.49 |
% |
Adjustment: PPP effect(1) |
|
|
(0.22 |
)% |
|
|
(0.05 |
)% |
Adjustment: Interest-earning deposits with banks effect(2) |
|
|
0.44 |
% |
|
|
0.32 |
% |
Adjusted net interest margin
(tax equivalent) (non-GAAP) |
|
|
3.56 |
% |
|
|
3.76 |
% |
|
|
Year ended |
|
Year ended |
(Dollars in thousands) |
|
December 31,2021 |
|
December 31,2020 |
ADJUSTED INTEREST-EARNING ASSETS |
|
|
|
|
Total average interest-earning assets |
|
$ |
4,151,239 |
|
|
$ |
3,663,344 |
|
Adjustment: Average PPP loans,
net |
|
|
(296,985 |
) |
|
|
(336,493 |
) |
Adjustment: Average
interest-earning deposits with banks |
|
|
(499,097 |
) |
|
|
(185,994 |
) |
Total adjusted average
interest-earning assets (non-GAAP) |
|
$ |
3,355,157 |
|
|
$ |
3,140,857 |
|
|
|
|
|
|
ADJUSTED INTEREST
INCOME |
|
|
|
|
Net interest income (tax
equivalent)(3) |
|
$ |
142,973 |
|
|
$ |
131,561 |
|
Adjustment: PPP income |
|
|
(19,691 |
) |
|
|
(10,675 |
) |
Adjustment: Interest on
interest-earning deposits with banks |
|
|
(655 |
) |
|
|
(262 |
) |
Adjusted net interest income
(tax equivalent) (non-GAAP) |
|
$ |
122,627 |
|
|
$ |
120,624 |
|
|
|
|
|
|
ADJUSTED NET INTEREST
MARGIN |
|
|
|
|
Net interest margin (tax
equivalent) |
|
|
3.44 |
% |
|
|
3.59 |
% |
Adjustment: PPP effect(1) |
|
|
(0.25 |
)% |
|
|
0.04 |
% |
Adjustment: Interest-earning
deposits with banks effect(2) |
|
|
0.46 |
% |
|
|
0.21 |
% |
Adjusted net interest margin
(tax equivalent) (non-GAAP) |
|
|
3.65 |
% |
|
|
3.84 |
% |
|
(1) |
|
PPP loan adjustments include an elimination of average PPP loans,
net of deferred SBA fees, as well as interest income on PPP loans
and related SBA fee accretion, included in net interest
income. |
|
(2) |
|
Interest-earning deposit
adjustments include an elimination of average interest-earning
deposits with banks, as well as interest income on interest-earning
deposits with banks, included in net interest income. |
|
(3) |
|
Year-to-date results reflect
tax equivalent adjustments as of December 31 of the years
presented. |
Contact
Info: Joseph R.
Lussier, Executive Vice President, Chief Financial Officer and
Treasurer (978) 656-5578
Enterprise Bancorp (NASDAQ:EBTC)
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