EXHIBIT 99
Contact Info: Mary Ellen Fitzpatrick (978) 656-5520
Senior Vice President, Corporate Communications
Enterprise Bancorp, Inc. Announces 2007 Year End Financial Results
LOWELL, Mass-(BUSINESS WIRE)-January 22, 2008-Enterprise Bancorp, Inc. (the “company”) (NASDAQ:EBTC) announced net income of $9.898 million for the year ended December 31, 2007 compared to $9.234 million during the year ended December 31, 2006, an increase of 7.2%. Diluted earnings per share were $1.25 for the year compared to $1.18 for 2006, an increase of 5.9%.
Net income for the fourth quarter ended December 31, 2007 amounted to $2.735 million compared to $2.545 million for the same period in 2006, an increase of 7.5%. Diluted earnings per share were $0.34 for the quarter ended December 31, 2007 compared to $0.32 for the same period in 2006, an increase of 6.3%.
George Duncan, Chairman of Enterprise Bancorp, Inc., commented, “Throughout 2007, the bank has made significant investments in human resources, learning and development, technology, marketing, facilities, and process improvements. With total assets surpassing $1 billion and total assets under management over $1.6 billion, Enterprise Bank is committed to our vision of long-term strategic growth and active involvement in our communities.
Jack Clancy, Chief Executive Officer, added, “We are very pleased with the strong financial results and continued growth of the bank over the past year, particularly considering the challenges that we read about in the newspapers every day regarding the banking industry. Enterprise Bank continues to be well positioned as the leading commercial bank in our markets. We are focused on serving the needs of our existing and future customers through a highly-skilled and well-trained team of employees focused on the Enterprise customer experience.”
The company’s year-to-date net income growth resulted primarily from increases in non-interest income and a decrease in the provision for loan losses, partially offset by increases in non-interest expense and a decrease in net interest income.
Net interest income for the year ended December 31, 2007 amounted to $40.7 million compared to $41.6 million for the year ended December 31, 2006, a decrease of 2%. The decrease was primarily due to a decline in net interest margin as discussed below, partially offset by an increase in interest income, due to an increase in average loan balances. Net interest margin was 4.45% for the year ended December 31, 2007 compared to 4.78% for 2006. From a quarterly trend perspective, net interest margin was 4.33% for the three months ended December 31, 2007 compared to 4.40% and 4.74% for the three-month periods ended September 30, 2007 and December 31, 2006. The overall decrease in margin resulted primarily from both the flat yield curve environment and rising funding costs, caused by the shift in funding from low-cost deposits to higher cost deposits, and the continued loan growth funded by higher cost brokered deposits and borrowings.
Non-interest income for the year ended December 31, 2007 was $10.1 million, an increase of $3.3 million, or 48%, over the prior year. Included in non-interest income were net gains on sales of investment securities of $1.7 million in the current year, compared to net losses of $204 thousand in 2006. In the fourth quarter of 2007, the company realized net gains on sales of investment securities of $786 thousand. Non-interest income excluding net gains/losses on investment securities increased $1.4 million, or 20%, over the prior year. This growth resulted primarily from increases in deposit-service fees and investment-advisory fees compared to the prior year.
Non-interest expense for the year ended December 31, 2007 amounted to $34.8 million, an increase of 7%, compared to $32.5 million for the year ended December 31, 2006. The increases over the prior year were predominately in salaries and employee benefits and occupancy expenses which reflected the strategic and operational costs necessary to support the company’s continued growth.
The provision for loan losses, which is impacted by asset quality and loan growth, amounted to $1.0 million for the year compared to $1.3 million in 2006. The provision for loan losses increased to $650 thousand in the fourth quarter of 2007 as compared to $367 thousand in the fourth quarter of 2006 due to loan growth. Asset quality remained favorable during the year with net charge-offs of only 0.05% of average total loans, or $395 thousand compared to $369 thousand in the prior year. The allowance for loan losses to total loans ratio was 1.62% at December 31, 2007 compared to 1.70% at December 31, 2006.
Key Financial Highlights
· Total assets were $1.058 billion at December 31, 2007 as compared to $979.3 million at December 31, 2006, an increase of $78.4 million, or 8%.
· Total loans amounted to $833.8 million at December 31, 2007, an increase of $72.7 million, or 10%, since December 31, 2006.
· Total deposits amounted to $868.8 million at December 31, 2007, compared to $867.5 million at December 31, 2006, an increase of $1.3 million. Total deposits excluding brokered deposits were $798.1 million at December 31, 2007 and $802.6 million at December 31, 2006, a decrease of $4.5 million, or 1%. Brokered deposits amounted to $70.7 million and $64.9 million on those respective dates.
· Investment assets under management increased to $573.6 million at December 31, 2007 compared to $502.1 million at December 31, 2006, an increase of 14%.
· Total assets under management amounted to $1.652 billion at December 31, 2007 as compared to $1.503 billion at December 31, 2006, an increase of $149.1 million, or 10%.
Enterprise Bancorp, Inc. is a Massachusetts corporation that conducts substantially all of its operations through Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank. 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 and deposit 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, North Central region of Massachusetts and South Central New Hampshire. The company has fourteen full-service branch banking offices located in the Massachusetts cities and towns of Lowell, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Leominster, Tewksbury, and Westford, and in Salem, New Hampshire, which serve those cities and towns as well as the surrounding communities. The Company plans to open a new branch facility in the city of Methuen, Massachusetts in Spring 2008.
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 and year ended December 31, 2007 and 2006
(unaudited)
| | Three Months Ended Dec. 31, | | Year Ended Dec. 31, | |
(Dollars in thousands, except per share data) | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Interest and dividend income: | | | | | | | | | |
Loans | | $ | 15,129 | | $ | 14,304 | | $ | 59,065 | | $ | 54,106 | |
Investment securities | | 1,520 | | 1,439 | | 5,671 | | 5,997 | |
Total short-term investments | | 92 | | 151 | | 301 | | 408 | |
Total interest and dividend income | | 16,741 | | 15,894 | | 65,037 | | 60,511 | |
| | | | | | | | | |
Interest expense: | | | | | | | | | |
Deposits | | 5,642 | | 4,845 | | 22,093 | | 16,866 | |
Borrowed funds | | 499 | | 182 | | 1,088 | | 908 | |
Junior subordinated debentures | | 294 | | 294 | | 1,177 | | 1,177 | |
Total interest expense | | 6,435 | | 5,321 | | 24,358 | | 18,951 | |
| | | | | | | | | |
Net interest income | | 10,306 | | 10,573 | | 40,679 | | 41,560 | |
| | | | | | | | | |
Provision for loan losses | | 650 | | 367 | | 1,000 | | 1,259 | |
Net interest income after provision for loan losses | | 9,656 | | 10,206 | | 39,679 | | 40,301 | |
| | | | | | | | | |
Non-interest income: | | | | | | | | | |
Investment advisory fees | | 788 | | 722 | | 3,177 | | 2,735 | |
Deposit service fees | | 781 | | 625 | | 2,848 | | 2,302 | |
Bank-owned life insurance | | 154 | | 151 | | 602 | | 391 | |
Net gains (losses) on sales of investment securities | | 786 | | (223 | ) | 1,655 | | (204 | ) |
Gains on sales of loans | | 57 | | 30 | | 201 | | 147 | |
Other income | | 405 | | 372 | | 1,625 | | 1,445 | |
Total non-interest income | | 2,971 | | 1,677 | | 10,108 | | 6,816 | |
| | | | | | | | | |
Non-interest expense: | | | | | | | | | |
Salaries and employee benefits | | 5,099 | | 4,205 | | 21,044 | | 19,169 | |
Occupancy expenses | | 1,597 | | 1,621 | | 6,470 | | 6,095 | |
Audit, legal and other professional fees | | 406 | | 525 | | 1,487 | | 1,447 | |
Advertising and public relations | | 514 | | 417 | | 1,389 | | 1,372 | |
Supplies and postage | | 192 | | 238 | | 896 | | 874 | |
Investment advisory and custodial expenses | | 114 | | 136 | | 498 | | 500 | |
Other operating expenses | | 846 | | 832 | | 3,060 | | 3,083 | |
Total non-interest expense | | 8,768 | | 7,974 | | 34,844 | | 32,540 | |
| | | | | | | | | |
Income before income taxes | | 3,859 | | 3,909 | | 14,943 | | 14,577 | |
Income tax expense | | 1,124 | | 1,364 | | 5,045 | | 5,343 | |
| | | | | | | | | |
Net income | | $ | 2,735 | | $ | 2,545 | | $ | 9,898 | | $ | 9,234 | |
| | | | | | | | | |
Basic earnings per share | | $ | 0.35 | | $ | 0.33 | | $ | 1.27 | | $ | 1.21 | |
| | | | | | | | | |
Diluted earnings per share | | $ | 0.34 | | $ | 0.32 | | $ | 1.25 | | $ | 1.18 | |
| | | | | | | | | |
Basic weighted average common shares outstanding | | 7,882,894 | | 7,710,247 | | 7,819,160 | | 7,661,178 | |
| | | | | | | | | |
Diluted weighted average common shares outstanding | | 7,951,566 | | 7,849,643 | | 7,913,006 | | 7,821,297 | |
ENTERPRISE BANCORP, INC.
Consolidated Balance Sheets
(unaudited)
| | December 31, | | December 31, | |
(Dollars in thousands) | | 2007 | | 2006 | |
| | | | | |
Assets | | | | | |
Cash and cash equivalents: | | | | | |
Cash and due from banks | | $ | 24,930 | | $ | 35,583 | |
Short-term investments | | 7,788 | | 15,304 | |
Total cash and cash equivalents | | 32,718 | | 50,887 | |
| | | | | |
Investment securities at fair value | | 145,517 | | 131,540 | |
Loans, less allowance for loan losses of $13,545 and $12,940
at December 31, 2007 and 2006, respectively | | 820,274 | | 748,173 | |
Premises and equipment | | 19,296 | | 16,015 | |
Accrued interest receivable | | 5,777 | | 5,464 | |
Deferred income taxes, net | | 7,722 | | 6,861 | |
Bank-owned life insurance | | 12,736 | | 12,212 | |
Prepaid expenses and other assets | | 7,250 | | 1,976 | |
Income taxes receivable | | 378 | | — | |
Core deposit intangible, net of amortization | | 342 | | 475 | |
Goodwill | | 5,656 | | 5,656 | |
| | | | | |
Total assets | | $ | 1,057,666 | | $ | 979,259 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
| | | | | |
Liabilities | | | | | |
Deposits | | $ | 868,786 | | $ | 867,522 | |
Borrowed funds | | 81,429 | | 15,105 | |
Junior subordinated debentures | | 10,825 | | 10,825 | |
Accrued expenses and other liabilities | | 6,245 | | 6,567 | |
Income taxes payable | | — | | 92 | |
Accrued interest payable | | 3,369 | | 2,105 | |
| | | | | |
Total liabilities | | 970,654 | | 902,216 | |
| | | | | |
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; 7,912,715 and 7,722,288 shares issued and
outstanding at December 31, 2007 and 2006, respectively | | 79 | | 77 | |
Additional paid-in capital | | 28,051 | | 25,806 | |
Retained earnings | | 58,527 | | 51,127 | |
Accumulated other comprehensive income | | 355 | | 33 | |
| | | | | |
Total stockholders’ equity | | 87,012 | | 77,043 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 1,057,666 | | $ | 979,259 | |
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios
(unaudited)
| | At or for the | | At or for the | |
| | Year ended | | year ended | |
| | December 31, | | December 31, | |
(Dollars in thousands, except per share data) | | 2007 | | 2006 | |
| | | | | |
Balance Sheet Items: | | | | | |
Total assets | | $ | 1,057,666 | | $ | 979,259 | |
Loans serviced for others | | 20,826 | | 21,659 | |
Investment assets under management | | 573,608 | | 502,059 | |
Total assets under management | | $ | 1,652,100 | | $ | 1,502,977 | |
| | | | | |
Book value per share | | $ | 11.00 | | $ | 9.98 | |
Dividends per common share | | $ | 0.32 | | $ | 0.28 | |
Total capital to risk weighted assets | | 11.44 | % | 11.37 | % |
Tier 1 capital to risk weighted assets | | 10.19 | % | 10.08 | % |
Tier 1 capital to average assets | | 8.84 | % | 8.47 | % |
Allowance for loan losses to total loans | | 1.62 | % | 1.70 | % |
Non-performing loans to total loans | | 0.47 | % | 0.24 | % |
| | | | | |
Income Statement Items: | | | | | |
Return on average assets | | 0.99 | % | 0.98 | % |
Return on average stockholders’ equity | | 12.11 | % | 12.89 | % |
Net interest margin (tax equivalent) | | 4.45 | % | 4.78 | % |
