Chief Executive Officer
Executive Chairman & Founder
Net Income
Net income for the three months ended
- The increase in net income was due primarily to an increase in net interest income of
$6.5 million , partially offset by increases in the provision for credit losses of$838 thousand and non-interest expense of$1.6 million and a decrease in non-interest income of$1.8 million . - The decrease in non-interest income for the three months ended
December 31, 2022 was impacted by three non-core operating transactions further discussed under the heading "Non-Interest Income," below.
Net Interest Income
Net interest income for the three months ended
- The increase in net interest income was due largely to increases in loan income, excluding Paycheck Protection Program ("PPP") income (non-GAAP), of
$8 .5 million and other interest-earning asset income of$3 .2 million, partially offset by a decrease in PPP income of$3 .2 million and an increase in deposit interest expense of$2 .4 million.
Net Interest Margin
Tax-equivalent net interest margin ("net interest margin") (non-GAAP) was 3.81% for the three months ended
Net interest margin has been favorably impacted by increases in market interest rates and the prime lending rate over the comparable periods. In particular, interest-earning deposits with banks have been impacted most favorably, as noted below.
- Average interest-earning deposits with banks amounted to
$358 .2 million, a decrease of$173.3 million , or 33%, while the yield increased 354 basis points. The decrease in average interest-earning deposits with banks resulted primarily from funding growth in the loan portfolio and the increase in yield reflected a significant change in market interest rates during 2022.
Other items impacting net interest margin for the three months ended
- Average investment securities increased
$81.6 million , or 9%, while the tax-equivalent yield remained unchanged. - Average loans increased
$245.3 million , or 9%, and the tax-equivalent yield increased 32 basis points.- Average core loans (non-GAAP) increased
$347.1 million , or 13%, and the yield increased 62 basis points. Core loan yields (non-GAAP) have benefited primarily from increases in the prime lending rate of 425 basis points between March and December of 2022. - Average PPP loans outstanding decreased
$101.7 million , or 98%, due to the continued forgiveness of PPP loans by theSmall Business Administration (the "SBA") during the period. PPP income amounted to $24 thousand for the three months endedDecember 31, 2022 , compared to$3.2 million for the three months ended December 31, 2021.
- Average core loans (non-GAAP) increased
- Average total deposits increased
$128.8 million , or 3%, and the yield increased 23 basis points as a result of higher market rates due to competition within the market.
Provision for Credit Losses
The provision for credit losses for the three months ended
- The provision for the three months ended
December 31, 2022 , consisted of$1.6 million for loans outstanding and $266 thousand for reserves on unfunded commitments (included in other liabilities). - The majority of the provision for credit losses during the fourth quarter of 2022 related to growth in the Company's loan portfolio and in off-balance sheet commitments.
Non-Interest Income
Non-interest income for the three months ended
- On
October 5, 2022 , the Company ended its revenue sharing relationship with an insurance agency and sold the rights to the future cash flows on these insurance policies to the agency. The transaction resulted in a one-time gain on sale of insurance commissions of$2.0 million and the Company has no other insurance agency relationships. Prior to the sale, the Company had referred clients, assisted with servicing and shared the resulting revenue. - In the fourth quarter, the Company realized net losses on sales of debt securities of
$3.0 million after executing a bond restructure in which it sold lower-yielding debt securities with an amortized cost of$39.9 million . - Non-interest income for the prior year quarter was impacted by a gain on the sale of other real estate owned ("OREO") of
$1.1 million .
Excluding these three non-core operating items, non-interest income increased $359 thousand, or 7%, resulting primarily from increases in deposit and interchange fees of $448 thousand, partially offset by a decrease in wealth management fees of $201 thousand.
Non-Interest Expense
Non-interest expense for the three months ended
- The increase in non-interest expense over the prior year period resulted primarily from increases in salaries and employee benefits of
$1.4 million , audit, legal and other professional fees of $226 thousand and advertising and public relation expense of $250 thousand.
Credit Quality
The allowance for credit losses ("ACL") for loans amounted to
Net charge-offs for the three months ended
Non-performing loans amounted to
Balance Sheet
Total assets amounted to
Total interest-earning deposits with banks amounted to
Total investment securities at fair value amounted to
Total loans amounted to
- Core loans (non-GAAP) increased
$329.1 million , or 12%, over the respective periods. Included in the loan growth for the period was$75.7 million in retained residential mortgages. - At
December 31, 2022 , the Company had$2.2 million in PPP loans outstanding, compared to$71.5 million atDecember 31, 2021 . Loans that were originated under the PPP and remained outstanding atDecember 31, 2022 are considered to be core loans (non-GAAP), as management does not expect the majority of the remaining balances to be forgiven by the SBA.
Customer deposits amounted to
Total shareholders' equity amounted to
The Company's reported book value per common share and return on average shareholders' equity ratios were impacted by the change in AOCI as follows:
- Book value per common share was
$23.26 atDecember 31, 2022 , compared to$28.82 atDecember 31, 2021 , a decrease of 19%. Excluding AOCI (non-GAAP), book value per common share was$31.19 atDecember 31, 2022 , compared to$28.43 atDecember 31, 2021 , an increase of 10%. - Return on average shareholders' equity was 18.08% and 12.56% for the quarters ended
December 31, 2022 , andDecember 31, 2021 , respectively. Return on average shareholders' equity, excluding AOCI (non-GAAP), was 13.03% and 12.69% for the quarters endedDecember 31, 2022 , andDecember 31, 2021 , respectively.
Total Capital and Tier 1 Capital to risk weighted assets, of which AOCI is not a component, amounted to 13.49% and 10.56%, respectively, at
Wealth Management
Wealth assets under management and wealth assets under administration, which are not carried as assets on the Company's consolidated balance sheets, amounted to
Non-GAAP Measures
Throughout this press release, certain measures have been adjusted to provide what management believes are more meaningful comparisons between periods. The items principally impacted and reported as non-GAAP were loans (PPP loans), shareholders' equity (AOCI), and any related measures presented. We refer to any prior period measure that excludes PPP loans as "core". The remaining PPP loans outstanding at
About
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 changes in market interest rates, the persistence of the current inflationary environment in our market areas and
ENTERPRISE BANCORP, INC.
Consolidated Balance Sheets
(unaudited)
(Dollars in thousands, except per share data) | 2022 | 2021 | ||||||
Assets | ||||||||
Cash and cash equivalents: | ||||||||
Cash and due from banks | $ | 36,901 | $ | 33,572 | ||||
Interest-earning deposits with banks | 230,688 | 403,004 | ||||||
Total cash and cash equivalents | 267,589 | 436,576 | ||||||
Investments: | ||||||||
Debt securities at fair value (amortized cost of | 816,102 | 956,430 | ||||||
Equity securities at fair value | 4,269 | 1,785 | ||||||
Total investment securities at fair value | 820,371 | 958,215 | ||||||
2,343 | 2,164 | |||||||
Loans: | ||||||||
Total loans | 3,180,518 | 2,920,684 | ||||||
Allowance for credit losses | (52,640 | ) | (47,704 | ) | ||||
Net loans | 3,127,878 | 2,872,980 | ||||||
Premises and equipment, net | 44,228 | 44,689 | ||||||
Lease right-of-use asset | 24,923 | 24,295 | ||||||
Accrued interest receivable | 17,117 | 13,354 | ||||||
Deferred income taxes, net | 51,981 | 19,644 | ||||||
Bank-owned life insurance | 64,156 | 62,954 | ||||||
Prepaid income taxes | 683 | 279 | ||||||
Prepaid expenses and other assets | 11,408 | 7,013 | ||||||
5,656 | 5,656 | |||||||
Total assets | $ | 4,438,333 | $ | 4,447,819 | ||||
Liabilities and Shareholders' Equity | ||||||||
Liabilities | ||||||||
Deposits | $ | 4,035,806 | $ | 3,980,239 | ||||
Borrowed funds | 3,216 | 5,479 | ||||||
Subordinated debt | 59,182 | 58,979 | ||||||
Lease liability | 24,415 | 23,627 | ||||||
Accrued expenses and other liabilities | 31,442 | 31,063 | ||||||
Accrued interest payable | 2,005 | 1,537 | ||||||
Total liabilities | 4,156,066 | 4,100,924 | ||||||
Commitments and Contingencies | ||||||||
Shareholders' Equity | ||||||||
Preferred stock, | — | — | ||||||
Common stock, | 121 | 120 | ||||||
Additional paid-in capital | 103,793 | 100,352 | ||||||
Retained earnings | 274,560 | 241,761 | ||||||
Accumulated other comprehensive (loss) income | (96,207 | ) | 4,662 | |||||
Total shareholders' equity | 282,267 | 346,895 | ||||||
Total liabilities and shareholders' equity | $ | 4,438,333 | $ | 4,447,819 | ||||
ENTERPRISE BANCORP, INC.
Consolidated Statements of Income
(unaudited)
Three months ended | Year ended | |||||||
(Dollars in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||
Interest and dividend income: | ||||||||
Loans and loans held for sale | ||||||||
Investment securities | 4,868 | 4,428 | 18,965 | 15,143 | ||||
Other interest-earning assets | 3,372 | 211 | 6,014 | 682 | ||||
Total interest and dividend income | 46,025 | 37,117 | 160,913 | 149,033 | ||||
Interest expense: | ||||||||
Deposits | 2,980 | 627 | 5,711 | 3,922 | ||||
Borrowed funds | 13 | 17 | 52 | 60 | ||||
Subordinated debt | 867 | 818 | 3,352 | 3,495 | ||||
Total interest expense | 3,860 | 1,462 | 9,115 | 7,477 | ||||
Net interest income | 42,165 | 35,655 | 151,798 | 141,556 | ||||
Provision for credit losses | 1,861 | 1,023 | 5,800 | 1,770 | ||||
Net interest income after provision for credit losses | 40,304 | 34,632 | 145,998 | 139,786 | ||||
Non-interest income: | ||||||||
Wealth management fees | 1,568 | 1,769 | 6,533 | 6,787 | ||||
Deposit and interchange fees | 2,349 | 1,901 | 8,196 | 6,971 | ||||
Income on bank-owned life insurance, net | 309 | 303 | 1,202 | 821 | ||||
Net (losses) gains on sales of debt securities | (3,035) | — | (1,973) | 128 | ||||
Net gains on sales of loans | — | 38 | 30 | 833 | ||||
Net gain on sale of OREO | — | 1,126 | — | 1,126 | ||||
Net gain on sale of insurance commissions | 2,034 | — | 2,034 | — | ||||
Loss on termination of swaps | — | — | — | (1,847) | ||||
Gain (loss) on equity securities | 174 | 92 | (514) | 246 | ||||
Other income | 811 | 748 | 2,954 | 3,042 | ||||
Total non-interest income | 4,210 | 5,977 | 18,462 | 18,107 | ||||
Non-interest expense: | ||||||||
Salaries and employee benefits | 18,670 | 17,256 | 72,120 | 66,633 | ||||
Occupancy and equipment expenses | 2,317 | 2,382 | 9,299 | 9,650 | ||||
Technology and telecommunications expenses | 2,581 | 2,697 | 10,735 | 10,574 | ||||
Advertising and public relations expenses | 1,021 | 771 | 2,758 | 2,373 | ||||
Audit, legal and other professional fees | 871 | 645 | 2,949 | 2,347 | ||||
Deposit insurance premiums | 470 | 583 | 1,783 | 1,910 | ||||
Supplies and postage expenses | 249 | 214 | 912 | 819 | ||||
Loss on extinguishment of subordinated debt | — | — | — | 713 | ||||
Other operating expenses | 1,988 | 1,978 | 7,758 | 7,116 | ||||
Total non-interest expense | 28,167 | 26,526 | 108,314 | 102,135 | ||||
Income before income taxes | 16,347 | 14,083 | 56,146 | 55,758 | ||||
Provision for income taxes | 4,041 | 3,235 | 13,430 | 13,587 | ||||
Net income | ||||||||
Basic earnings per common share | ||||||||
Diluted earnings per common share | ||||||||
Basic weighted average common shares outstanding | 12,128,019 | 12,031,471 | 12,103,033 | 12,005,838 | ||||
Diluted weighted average common shares outstanding | 12,168,753 | 12,093,097 | 12,149,777 | 12,051,293 | ||||
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios
(unaudited)
At or for the three months ended | ||||||||||||||||||||
(Dollars in thousands, except per share data) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Balance Sheet Data | ||||||||||||||||||||
Total cash and cash equivalents | $ | 267,589 | $ | 413,688 | $ | 306,460 | $ | 429,687 | $ | 436,576 | ||||||||||
Total investment securities at fair value | 820,371 | 831,030 | 866,580 | 910,013 | 958,215 | |||||||||||||||
Total loans | 3,180,518 | 3,109,369 | 3,084,915 | 2,962,721 | 2,920,684 | |||||||||||||||
Allowance for credit losses | (52,640 | ) | (51,211 | ) | (50,703 | ) | (48,424 | ) | (47,704 | ) | ||||||||||
Total assets | 4,438,333 | 4,529,820 | 4,417,447 | 4,454,474 | 4,447,819 | |||||||||||||||
Total deposits | 4,035,806 | 4,138,038 | 4,016,814 | 4,034,500 | 3,980,239 | |||||||||||||||
Subordinated debt | 59,182 | 59,102 | 59,039 | 59,009 | 58,979 | |||||||||||||||
Total shareholders' equity | 282,267 | 272,193 | 285,110 | 310,539 | 346,895 | |||||||||||||||
Total liabilities and shareholders' equity | 4,438,333 | 4,529,820 | 4,417,447 | 4,454,474 | 4,447,819 | |||||||||||||||
Wealth Management | ||||||||||||||||||||
Wealth assets under management | $ | 891,451 | $ | 835,661 | $ | 849,536 | $ | 961,491 | $ | 1,041,409 | ||||||||||
Wealth assets under administration | $ | 198,586 | $ | 185,977 | $ | 205,646 | $ | 243,247 | $ | 257,867 | ||||||||||
Shareholders' Equity Ratios | ||||||||||||||||||||
Book value per common share | $ | 23.26 | $ | 22.44 | $ | 23.53 | $ | 25.66 | $ | 28.82 | ||||||||||
Dividends paid per common share | $ | 0.205 | $ | 0.205 | $ | 0.205 | $ | 0.205 | $ | 0.185 | ||||||||||
Regulatory Capital Ratios | ||||||||||||||||||||
Total capital to risk weighted assets | 13.49 | % | 13.49 | % | 13.38 | % | 13.72 | % | 13.73 | % | ||||||||||
Tier 1 capital to risk weighted assets(1) | 10.56 | % | 10.52 | % | 10.38 | % | 10.65 | % | 10.62 | % | ||||||||||
Tier 1 capital to average assets | 8.10 | % | 7.89 | % | 8.03 | % | 7.83 | % | 7.56 | % | ||||||||||
Credit Quality Data | ||||||||||||||||||||
Non-performing loans | $ | 6,122 | $ | 5,717 | $ | 6,321 | $ | 25,173 | $ | 26,522 | ||||||||||
Non-performing loans to total loans | 0.19 | % | 0.18 | % | 0.20 | % | 0.85 | % | 0.91 | % | ||||||||||
Non-performing assets to total assets | 0.14 | % | 0.13 | % | 0.14 | % | 0.57 | % | 0.60 | % | ||||||||||
ACL for loans to total loans | 1.66 | % | 1.65 | % | 1.64 | % | 1.63 | % | 1.63 | % | ||||||||||
Income Statement Data | ||||||||||||||||||||
Net interest income | $ | 42,165 | $ | 39,779 | $ | 35,821 | $ | 34,033 | $ | 35,655 | ||||||||||
Provision for credit losses | 1,861 | 1,000 | 2,409 | 530 | 1,023 | |||||||||||||||
Total non-interest income | 4,210 | 4,525 | 4,132 | 5,595 | 5,977 | |||||||||||||||
Total non-interest expense | 28,167 | 27,537 | 26,853 | 25,757 | 26,526 | |||||||||||||||
Income before income taxes | 16,347 | 15,767 | 10,691 | 13,341 | 14,083 | |||||||||||||||
Provision for income taxes | 4,041 | 3,805 | 2,530 | 3,054 | 3,235 | |||||||||||||||
Net income | $ | 12,306 | $ | 11,962 | $ | 8,161 | $ | 10,287 | $ | 10,848 | ||||||||||
Income Statement Ratios | ||||||||||||||||||||
Diluted earnings per common share | $ | 1.01 | $ | 0.98 | $ | 0.67 | $ | 0.85 | $ | 0.90 | ||||||||||
Return on average total assets | 1.08 | % | 1.05 | % | 0.76 | % | 0.95 | % | 0.97 | % | ||||||||||
Return on average shareholders' equity | 18.08 | % | 16.47 | % | 11.24 | % | 12.56 | % | 12.56 | % | ||||||||||
Net interest margin (tax-equivalent)(2) | 3.81 | % | 3.61 | % | 3.45 | % | 3.28 | % | 3.34 | % |
(1) Ratio also represents common equity tier 1 capital to risk weighted assets as of the periods presented.
(2) 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.
ENTERPRISE BANCORP, INC.
Consolidated Loan and Deposit Data
(unaudited)
Major classifications of loans at the dates indicated were as follows:
(Dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Commercial real estate | $ | 1,921,410 | $ | 1,886,365 | $ | 1,865,198 | $ | 1,779,691 | $ | 1,680,792 | ||||||||||
Commercial and industrial | 412,277 | 413,347 | 422,006 | 408,341 | 412,070 | |||||||||||||||
Commercial construction | 424,049 | 396,027 | 385,752 | 375,709 | 410,443 | |||||||||||||||
SBA PPP | 2,213 | 2,725 | 15,288 | 32,153 | 71,502 | |||||||||||||||
Total commercial loans | 2,759,949 | 2,698,464 | 2,688,244 | 2,595,894 | 2,574,807 | |||||||||||||||
Residential mortgages | 332,632 | 321,663 | 307,131 | 280,507 | 256,940 | |||||||||||||||
Home equity loans and lines | 79,807 | 80,882 | 81,648 | 78,557 | 80,467 | |||||||||||||||
Consumer | 8,130 | 8,360 | 7,892 | 7,763 | 8,470 | |||||||||||||||
Total retail loans | 420,569 | 410,905 | 396,671 | 366,827 | 345,877 | |||||||||||||||
Total loans | 3,180,518 | 3,109,369 | 3,084,915 | 2,962,721 | 2,920,684 | |||||||||||||||
ACL for loans | (52,640 | ) | (51,211 | ) | (50,703 | ) | (48,424 | ) | (47,704 | ) | ||||||||||
Net loans | $ | 3,127,878 | $ | 3,058,158 | $ | 3,034,212 | $ | 2,914,297 | $ | 2,872,980 | ||||||||||
Deposits are summarized as follows as of the periods indicated:
(Dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Non-interest checking | $ | 1,361,588 | $ | 1,441,104 | $ | 1,457,220 | $ | 1,444,047 | $ | 1,364,258 | |||||
Interest-bearing checking | 678,715 | 719,474 | 712,898 | 718,107 | 743,587 | ||||||||||
Savings | 326,666 | 351,665 | 334,728 | 334,923 | 310,244 | ||||||||||
Money market | 1,381,645 | 1,395,756 | 1,293,453 | 1,337,670 | 1,355,701 | ||||||||||
CDs | 187,758 | 163,520 | 144,084 | 149,309 | 154,403 | ||||||||||
CDs greater than | 99,434 | 66,519 | 74,431 | 50,444 | 52,046 | ||||||||||
Deposits | $ | 4,035,806 | $ | 4,138,038 | $ | 4,016,814 | $ | 4,034,500 | $ | 3,980,239 | |||||
ENTERPRISE BANCORP, INC.
Consolidated Average Balance Sheets and Yields (tax-equivalent basis)
(unaudited)
The following table presents the Company's average balance sheets, net interest income and average rates for the three months ended
Three months ended | Three months ended | |||||||||||||||||
(Dollars in thousands) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | ||||||||||||
Assets: | ||||||||||||||||||
Loans and loans held for sale(2) (tax-equivalent) | $ | 3,118,304 | $ | 37,895 | 4.82 | % | $ | 2,872,959 | $ | 32,593 | 4.50 | % | ||||||
Investment securities(3) (tax-equivalent) | 952,975 | 5,099 | 2.14 | % | 871,368 | 4,660 | 2.14 | % | ||||||||||
Other interest-earning assets(4) | 360,557 | 3,372 | 3.71 | % | 533,653 | 211 | 0.16 | % | ||||||||||
Total interest-earnings assets (tax-equivalent) | 4,431,836 | 46,366 | 4.16 | % | 4,277,980 | 37,464 | 3.48 | % | ||||||||||
Other assets | 71,289 | 179,178 | ||||||||||||||||
Total assets | $ | 4,503,125 | $ | 4,457,158 | ||||||||||||||
Liabilities and stockholders' equity: | ||||||||||||||||||
Interest checking, savings and money market | $ | 2,413,646 | 2,211 | 0.36 | % | $ | 2,331,973 | 355 | 0.06 | % | ||||||||
CDs | 260,265 | 769 | 1.17 | % | 209,299 | 272 | 0.52 | % | ||||||||||
Borrowed funds | 2,999 | 13 | 1.69 | % | 7,306 | 17 | 0.90 | % | ||||||||||
Subordinated debt(5) | 59,132 | 867 | 5.86 | % | 58,961 | 818 | 5.55 | % | ||||||||||
Total interest-bearing funding | 2,736,042 | 3,860 | 0.56 | % | 2,607,539 | 1,462 | 0.22 | % | ||||||||||
Non-interest checking | 1,442,108 | — | 1,445,934 | — | ||||||||||||||
Total deposits, borrowed funds and subordinated debt | 4,178,150 | 3,860 | 0.37 | % | 4,053,473 | 1,462 | 0.14 | % | ||||||||||
Other liabilities | 54,922 | 61,050 | ||||||||||||||||
Total liabilities | 4,233,072 | 4,114,523 | ||||||||||||||||
Stockholders' equity | 270,053 | 342,635 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 4,503,125 | $ | 4,457,158 | ||||||||||||||
Net interest-rate spread (tax-equivalent) | 3.60 | % | 3.26 | % | ||||||||||||||
Net interest income (tax-equivalent) | 42,506 | 36,002 | ||||||||||||||||
Net interest margin (tax-equivalent) | 3.81 | % | 3.34 | % | ||||||||||||||
Less tax-equivalent adjustment | 341 | 347 | ||||||||||||||||
Net interest income | $ | 42,165 | $ | 35,655 | ||||||||||||||
Net interest margin | 3.78 | % | 3.31 | % |
(1) Average yields and interest income are presented on a tax-equivalent basis, calculated using a
(2) Average loans and loans held for sale include non-accrual loans and are net of average deferred loan fees.
(3) Average investments are presented at average amortized cost.
(4) Average other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock.
(5) The subordinated debt is net of average deferred debt issuance costs.
ENTERPRISE BANCORP, INC.
Consolidated Average Balance Sheets and Yields (tax-equivalent basis)
(unaudited)
The following table presents the Company's average balance sheets, net interest income and average rates for the years ended
Year ended | Year ended | |||||||||||||||||
(Dollars in thousands) | Average Balance | Interest(1) | Average Yield(1) | Average Balance | Interest(1) | Average Yield(1) | ||||||||||||
Assets: | ||||||||||||||||||
Loans and loans held for sale(2) (tax-equivalent) | $ | 3,034,608 | $ | 136,381 | 4.49 | % | $ | 2,969,777 | $ | 133,696 | 4.50 | % | ||||||
Investment securities(3) (tax-equivalent) | 955,927 | 19,891 | 2.08 | % | 680,261 | 16,072 | 2.36 | % | ||||||||||
Other interest-earning assets(4) | 333,433 | 6,014 | 1.80 | % | 501,201 | 682 | 0.14 | % | ||||||||||
Total interest-earnings assets (tax-equivalent) | 4,323,968 | 162,286 | 3.75 | % | 4,151,239 | 150,450 | 3.62 | % | ||||||||||
Other assets | 110,238 | 169,315 | ||||||||||||||||
Total assets | $ | 4,434,206 | $ | 4,320,554 | ||||||||||||||
Liabilities and stockholders' equity: | ||||||||||||||||||
Interest checking, savings and money market | $ | 2,381,774 | 4,091 | 0.17 | % | $ | 2,249,023 | 1,558 | 0.07 | % | ||||||||
CDs | 221,050 | 1,620 | 0.73 | % | 224,627 | 1,700 | 0.76 | % | ||||||||||
Brokered deposits | — | — | — | % | 45,617 | 664 | 1.46 | % | ||||||||||
Borrowed funds | 3,286 | 52 | 1.58 | % | 7,632 | 60 | 0.79 | % | ||||||||||
Subordinated debt(5) | 59,050 | 3,352 | 5.68 | % | 62,546 | 3,495 | 5.59 | % | ||||||||||
Total interest-bearing funding | 2,665,160 | 9,115 | 0.34 | % | 2,589,445 | 7,477 | 0.29 | % | ||||||||||
Non-interest checking | 1,422,618 | — | 1,341,633 | — | ||||||||||||||
Total deposits, borrowed funds and subordinated debt | 4,087,778 | 9,115 | 0.22 | % | 3,931,078 | 7,477 | 0.19 | % | ||||||||||
Other liabilities | 51,274 | 51,913 | ||||||||||||||||
Total liabilities | 4,139,052 | 3,982,991 | ||||||||||||||||
Stockholders' equity | 295,154 | 337,563 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 4,434,206 | $ | 4,320,554 | ||||||||||||||
Net interest-rate spread (tax-equivalent) | 3.41 | % | 3.33 | % | ||||||||||||||
Net interest income (tax-equivalent) | 153,171 | 142,973 | ||||||||||||||||
Net interest margin (tax-equivalent) | 3.54 | % | 3.44 | % | ||||||||||||||
Less tax-equivalent adjustment | 1,373 | 1,417 | ||||||||||||||||
Net interest income | $ | 151,798 | $ | 141,556 | ||||||||||||||
Net interest margin | 3.51 | % | 3.41 | % |
(1) Average yields and interest income are presented on a tax-equivalent basis, calculated using a
(2) Average loans and loans held for sale include non-accrual loans and are net of average deferred loan fees.
(3) Average investments are presented at average amortized cost.
(4) Average other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock.
(5) The subordinated debt is net of average deferred debt issuance costs.
ENTERPRISE BANCORP, INC.
Non-GAAP Financial Measures and Reconciliations
(unaudited)
NON-GAAP MEASURES
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with GAAP. However, certain financial measures 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; therefore, these measures may not be comparable to other similarly titled measures as presented by 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) | 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||||
Total Core Loans | |||||||||||||||||||
Total loans | $ | 3,180,518 | $ | 3,109,369 | $ | 3,084,915 | $ | 2,962,721 | $ | 2,920,684 | |||||||||
Adjustment: PPP loans(1) | — | (2,725 | ) | (15,288 | ) | (32,153 | ) | (71,502 | ) | ||||||||||
Total core loans (non-GAAP) | $ | 3,180,518 | $ | 3,106,644 | $ | 3,069,627 | $ | 2,930,568 | $ | 2,849,182 |
(1) PPP loan outstanding at
Three months ended | Year ended | |||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Loan Income Excluding PPP Income | ||||||||||||||||
Loan income | $ | 37,785 | $ | 32,478 | $ | 135,934 | $ | 133,208 | ||||||||
Adjustment: PPP income | (24 | ) | (3,195 | ) | (2,561 | ) | (19,691 | ) | ||||||||
Loan income excluding PPP income (non-GAAP) | $ | 37,761 | $ | 29,283 | $ | 133,373 | $ | 113,517 | ||||||||
Net Interest Income Excluding PPP Income | ||||||||||||||||
Net interest income | $ | 42,165 | $ | 35,655 | $ | 151,798 | $ | 141,556 | ||||||||
Adjustment: PPP income | (24 | ) | (3,195 | ) | (2,561 | ) | (19,691 | ) | ||||||||
Net interest income excluding PPP income (non-GAAP) | $ | 42,141 | $ | 32,460 | $ | 149,237 | $ | 121,865 | ||||||||
ENTERPRISE BANCORP, INC.
Non-GAAP Financial Measures and Reconciliations (continued)
(unaudited)
The following tables summarize the reconciliation of GAAP to non-GAAP measures related to the impact of AOCI on the Company's reported book value per common share and return on average shareholders' equity:
At or for the three months ended | ||||||||
(Dollars in thousands, except per share data) | 2022 | 2021 | ||||||
Shareholders' Equity | ||||||||
Total shareholders' equity (as reported) | $ | 282,267 | $ | 346,895 | ||||
Less: accumulated other comprehensive (loss) income | (96,207 | ) | 4,662 | |||||
Shareholders' equity excluding AOCI (non-GAAP) | $ | 378,474 | $ | 342,233 | ||||
Book Value Per Common Share | ||||||||
Book value per common share (as reported) | $ | 23.26 | $ | 28.82 | ||||
Book value per common share excluding AOCI (non-GAAP) | $ | 31.19 | $ | 28.43 | ||||
Average Shareholders' Equity | ||||||||
Total average shareholders' equity (as reported) | $ | 270,053 | $ | 342,635 | ||||
Less: average accumulated other comprehensive (loss) income | (104,617 | ) | 3,585 | |||||
Average shareholders' equity excluding AOCI (non-GAAP) | $ | 374,670 | $ | 339,050 | ||||
Return on Average Shareholders' Equity | ||||||||
Return on average shareholders' equity (as reported) | 18.08 | % | 12.56 | % | ||||
Return on average shareholders' equity excluding AOCI (non-GAAP) | 13.03 | % | 12.69 | % | ||||
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