LOWELL, Mass., April 23, 2024 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ:EBTC), parent of Enterprise Bank, announced its financial results for the three months ended March 31, 2024. Net income amounted to $8.5 million, or $0.69 per diluted common share, for the three months ended March 31, 2024, compared to $7.9 million, or $0.64 per diluted share, for the three months ended December 31, 2023 and $10.8 million, or $0.88 per diluted share, for the three months ended March 31, 2023. Selected financial results at or for the three months ended March 31, 2024, were as follows: The returns on average assets and average equity were 0.75% and 10.47%, respectively. Tax-equivalent net interest margin (non-GAAP) ("net interest margin") was 3.20%. Total loans increased 2.4% compared to December 31, 2023. Total deposits increased 3.2% compared to December 31, 2023. Wealth assets under management and administration amounted to $1.37 billion and increased 4.0% compared to December 31, 2023. Chief Executive Officer Jack Clancy commented, "The first quarter of 2024 had solid net income with strong loan and deposit growth. Higher deposit costs and the inverted yield curve continued to be a headwind resulting in a net interest margin of 3.20%. We remain well positioned with a strong balance sheet that is centered around a high-quality loan portfolio, a conservative credit and reserve culture and favorable liquidity, core deposit funding and capital." Executive Chairman & Founder George Duncan added, "Despite the higher interest rates, our markets remain economically healthy, and we continue to opportunistically add new loan, deposit and wealth management customers. I was particularly pleased with the 3% growth in total deposits." Net Interest Income Net interest income for the three months ended March 31, 2024, amounted to $35.2 million, a decrease of $4.8 million, or 12%, compared to the three months ended March 31, 2023. The decrease was due primarily to an increase in deposit interest expense of $11.3 million which was driven by an increase in the cost of funds and changes in deposit mix, partially offset by an increase in loan interest income of $9.3 million due to loan growth and higher market interest rates. Net Interest Margin Three months ended – March 31, 2024, compared to December 31, 2023 Net interest margin was 3.20% for the three months ended March 31, 2024, compared to 3.29% for the three months ended December 31, 2023. Net interest margin compared to the prior quarter was impacted by the following factors: Average other interest-earning assets decreased $86.1 million, or 50%, while the yield increased 6 basis points. Average loan balances increased $140.2 million, or 4%, and the tax-equivalent yield increased 10 basis points. Average total deposits decreased $45.5 million, or 1%, while the yield increased 18 basis points. Average borrowed funds increased $56.1 million and the yield was 4.38%, an increase of 214 basis points from previously low levels. Three months ended – March 31, 2024, compared to March 31, 2023 Net interest margin was 3.20% for the three months ended March 31, 2024, compared to 3.76% for the three months ended March 31, 2023. Net interest margin compared to the prior year quarter was impacted by the following factors: Average other interest-earning assets decreased $112.7 million, or 57%, while the yield increased 97 basis points. Average investment securities decreased $173.7 million, or 19%, and the tax-equivalent yield decreased 8 basis points. Average loan balances increased $407.3 million, or 13%, and the tax-equivalent yield increased 44 basis points. Average total deposits increased $27.3 million, or 1%, and the yield increased 111 basis points. Average borrowed funds increased $60.4 million and the yield was 4.38%, an increase of 281 basis points from previously low levels. The decrease in net interest margin over the respective periods was due primarily to increases in funding costs, partially offset by increases in loan yields and other interest earning asset yields as well as loan growth. Yields on loans and other interest earning assets were positively impacted by the increases of 525 basis points in the federal funds rate from March 2022 through July 2023. During the current quarter, funding costs were impacted primarily by higher market interest rates, increased competition for deposits and changes in deposit mix as depositors sought higher yielding money market and certificate of deposit products. Provision for Credit Losses The provision for credit losses for the three months ended March 31, 2024, amounted to $622 thousand, compared to $2.7 million for the three months ended March 31, 2023. The provision expense for the first quarter of 2024 resulted primarily from growth in the Company's loan portfolio and a $1.6 million increase in reserves on individually evaluated loans, due primarily to the addition of one commercial construction loan which was credit downgraded, partially offset by the impact of an improved economic forecast in our allowance for credit loss ("ACL") model and a decrease in off-balance sheet commitments. Non-Interest Income Non-interest income for the three months ended March 31, 2024, amounted to $5.5 million, an increase of $738 thousand, or 16%, compared to the three months ended March 31, 2023. The increase in non-interest income was due primarily to increases in gains on equity securities of $481 thousand, wealth management fees of $263 thousand and income on bank-owned life insurance of $151 thousand. Non-Interest Expense Non-interest expense for the three months ended March 31, 2024, amounted to $28.9 million, an increase of $868 thousand, or 3%, compared to the three months ended March 31, 2023. The increase in non-interest expense was due primarily to increases in salaries and benefits expense of $655 thousand and deposit insurance premiums of $184 thousand. Balance Sheet Total assets amounted to $4.62 billion at March 31, 2024, compared to $4.47 billion at December 31, 2023, an increase of $158.0 million, or 4%. Total interest-earning deposits with banks, which consist of overnight and short-term investments, amounted to $106.4 million at March 31, 2024, compared to $19.1 million at December 31, 2023. The increase of $87.2 million was due primarily to increases in deposits and borrowed funds, partially offset by loan growth. Total investment securities at fair value amounted to $652.0 million at March 31, 2024, compared to $668.2 million at December 31, 2023. The decrease of $16.1 million, or 2%, was largely attributable to principal pay-downs, calls and maturities during the three months ended March 31, 2024. Unrealized losses on debt securities amounted to $105.6 million at March 31, 2024, compared to $102.9 million at December 31, 2023, an increase of $2.8 million, or 3%. At March 31, 2024, management determined that no ACL for available-for-sale securities was necessary. Total loans amounted to $3.65 billion at March 31, 2024, compared to $3.57 billion at December 31, 2023. The increase of $86.7 million, or 2%, was due primarily to an increase in commercial real estate loans of $94.9 million. Total deposits amounted to $4.11 billion at March 31, 2024, compared to $3.98 billion at December 31, 2023. The increase of $128.6 million, or 3%, was due primarily to increases in money market and certificate of deposit balances of $66.2 million and $61.1 million, respectively. Total borrowed funds amounted to $63.2 million at March 31, 2024, compared to $25.8 million at December 31, 2023. The increase of $37.5 million, or 145%, was from an increase in advances used to support the Company's operations. Total shareholders' equity amounted to $333.4 million at March 31, 2024, compared to $329.1 million at December 31, 2023. The increase of $4.3 million, or 1%, was due primarily to an increase in retained earnings of $5.6 million, partially offset by an increase in the accumulated other comprehensive loss of $2.1 million. Credit Quality Selected credit quality metrics at or for the three months ended March 31, 2024, compared to December 31, 2023, were as follows: The ACL for loans amounted to $60.7 million, or 1.66% of total loans, compared to $59.0 million, or 1.65% of total loans. The reserve for unfunded commitments (included in other liabilities) amounted to $5.9 million, compared to $7.1 million. Non-performing loans amounted to $18.5 million, or 0.51% of total loans, compared to $11.4 million, or 0.32% of total loans. The increase in non-performing loans resulted primarily from one individually evaluated commercial construction loan which was credit downgraded and moved to non-accrual in the first quarter of 2024, as noted above. Annualized net charge-offs to average total loans remained low and amounted to 0.01% for the three months ended March 31, 2024, compared to annualized net recoveries to average total loans of 0.01% for the three months ended March 31, 2023. Wealth Management Wealth assets are not carried as assets on the Company's consolidated balance sheets. Wealth assets under management amounted to $1.11 billion at March 31, 2024, an increase of $27.3 million, or 3%, compared to December 31, 2023. Wealth assets under administration amounted to $268.1 million at March 31, 2024, an increase of $25.7 million, or 11%, compared to December 31, 2023, resulting primarily from an increase in market values as well as net asset growth. 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 138 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, 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 27 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, Londonderry, Nashua (2), Pelham, Salem and Windham. 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," "could," "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, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; potential recession in the United States and our market areas; the impacts related to or resulting from bank failures and any continuation of uncertainty in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response thereto; increased competition for deposits and related changes in deposit customer behavior; the impact of changes in market interest rates, whether due to continued elevated interest rates or potential reductions in interest rates and a resulting decline in net interest income; the persistence of the current inflationary pressures, or the resurgence of elevated levels of inflation, changes in market interest rates; the persistence of the current inflationary environment in our market areas and the United States; the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; the effects of declines in housing prices in the United States and our market areas; increases in unemployment rates in the United States and our market areas; declines in commercial real estate values and prices; uncertainty regarding United States fiscal debt and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; changes in tax laws; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential increased regulatory requirements and costs related to the transition and physical impacts of climate change; and current or future litigation, regulatory examinations or other legal and/or regulatory actions. 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)   March 31,2024   December 31,2023   March 31,2023 Assets             Cash and cash equivalents:             Cash and due from banks   $ 41,443     $ 37,443     $ 42,843   Interest-earning deposits with banks     106,391       19,149       172,850   Total cash and cash equivalents     147,834       56,592       215,693   Investments:             Debt securities at fair value (amortized cost of $749,561, $763,981 and $923,485, respectively)     643,924       661,113       825,520   Equity securities at fair value     8,102       7,058       5,375   Total investment securities at fair value     652,026       668,171       830,895   Federal Home Loan Bank stock     2,482       2,402       2,343   Loans held for sale     400       200       362   Loans:             Total loans     3,654,322       3,567,631       3,230,156   Allowance for credit losses     (60,741 )     (58,995 )     (55,002 ) Net loans     3,593,581       3,508,636       3,175,154   Premises and equipment, net     44,671       44,931       43,821   Lease right-of-use asset     24,645       24,820       24,751   Accrued interest receivable     20,501       19,233       18,540   Deferred income taxes, net     47,903       49,166       44,432   Bank-owned life insurance     65,878       65,455       64,463   Prepaid income taxes     5,771       1,589       3,636   Prepaid expenses and other assets     12,667       19,183       12,150   Goodwill     5,656       5,656       5,656   Total assets   $ 4,624,015     $ 4,466,034     $ 4,441,896   Liabilities and Shareholders'Equity             Liabilities             Deposits   $ 4,106,119     $ 3,977,521     $ 4,016,156   Borrowed funds     63,246       25,768       3,199   Subordinated debt     59,577       59,498       59,261   Lease liability     24,303       24,441       24,285   Accrued expenses and other liabilities     30,945       45,011       25,737   Accrued interest payable     6,386       4,678       1,940   Total liabilities     4,290,576       4,136,917       4,130,578   Commitments and Contingencies             Shareholders'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; 12,376,562, 12,272,674 and 12,222,717 shares issued and outstanding, respectively     124       123       122   Additional paid-in capital     108,246       107,377       104,621   Retained earnings     306,943       301,380       282,534   Accumulated other comprehensive loss     (81,874 )     (79,763 )     (75,959 ) Total shareholders' equity     333,439       329,117       311,318   Total liabilities and shareholders' equity   $ 4,624,015     $ 4,466,034     $ 4,441,896   ENTERPRISE BANCORP, INC. Consolidated Statements of Income (unaudited)       Three months ended (Dollars in thousands, except per share data)   March 31,2024   December 31,2023   March 31,2023 Interest and dividend income:             Other interest-earning assets   $ 1,172     $ 2,350     $ 2,208   Investment securities     4,034       4,219       5,073   Loans and loans held for sale     48,817       46,680       39,556   Total interest and dividend income     54,023       53,249       46,837   Interest expense:             Deposits     17,272       15,821       5,987   Borrowed funds     694       43       12   Subordinated debt     867       867       867   Total interest expense     18,833       16,731       6,866   Net interest income     35,190       36,518