Enterprise Bancorp (EBTC) 8-K Results of Operations and Financial Condition

Exhibit 99

Contact Info:	Mary Ellen Fitzpatrick (978) 656-5520
	Senior Vice President, Corporate Communications

Enterprise Bancorp, Inc. announces 2008 Net Income of $5.5 million, continued strong growth and expansion, and 5.6% dividend increase.

LOWELL, Mass (January 29, 2009). Enterprise Bancorp, Inc. (the “Company”) (NASDAQ:EBTC), parent of Enterprise Bank, announced net income of $5.5 million, or $0.69 on a diluted earnings per share basis, for the year ended December 31, 2008, compared to $9.9 million, or $1.25, respectively, for the year ended December 31, 2007.  Net income for the three months ended December 31, 2008, was $29 thousand, or $0.004 on a diluted earnings per share basis, compared to $2.7 million, or $0.34, respectively for the same period in 2007. The decline in earnings from the prior period included the impact of a charge on certain equity investments in the investment portfolio which reflect declines in the equity markets, significant increases in expenses associated with accelerated expansion and growth initiatives, and an increase in FDIC insurance premiums incurred by all banking institutions. Expenses related to expansion and growth initiatives include the opening of two branches, loan growth, and increased marketing and advertising expenses.  While these factors adversely affect earnings in the short-term, the Company feels this is an opportune time to incur such expenses and invest in our long-term growth.

Loan growth was strong in 2008 and particularly so during the fourth quarter. Loans increased by 14% in 2008.  During the three months ended December 31, 2008, loans increased by $40 million, a quarterly increase which amounts to an annualized growth rate of 18%.  Loan quality remains strong, particularly in light of the challenging economic environment, with loan quality ratios being favorable.

In the fourth quarter of 2008, the Company recorded an after-tax charge of $2.4 million on certain equity investments contained in its investment portfolio to reflect the impact of recent declines in the equity markets.  This net income charge had no impact on the Company’s capital, as the unrealized fair market value losses were already included in capital.

As previously announced, the Company declared a quarterly dividend of $0.095 per share to be paid on March 2, 2009, to shareholders of record as of February 9, 2009.  The quarterly dividend represents a 5.6% increase over the 2008 dividend rate.

Chief Executive Officer Jack Clancy commented, “2008 was a very successful year. While the current economic environment presents certain challenges for all companies, for a strong, well-capitalized local community bank, such as Enterprise, with a high-quality balance sheet and the ability and capital to lend, it is also a time of the utmost opportunity.  This has been demonstrated by our strong growth and expansion, and particularly by our 18% annualized loan growth in the fourth quarter. I am extremely proud and pleased with our widespread accomplishments and progress. We continue to expand with the opening of our Methuen, MA, branch in May 2008; our new Acton, MA, branch on January 12, 2009; and our second New Hampshire branch, scheduled to open in late 2009 in Derry.  Our commitment to our communities is unwavering, especially now when challenging economic times threaten the very existence of so many community-centered organizations. The Company continues to support local non-profit organizations through charitable giving and the founding, in 2008, of the Enterprise Bank Non-Profit Collaborative, a collection of educational forums, workshops and resources to benefit non-profits. In addition, in December 2008, as we prepared to celebrate the Bank’s 20th anniversary, the bank made a special $100,000 contribution to the Greater Lowell Community Foundation.  In November, at our First Annual Celebration of Excellence, the Company recognized ten remarkable local entrepreneurs, businesses and community leaders who have achieved success, inspired others to excel and have

truly made a difference in the communities we serve.  We undertook many significant initiatives in 2008 including: investments in training; learning and development; marketing; technology; and facilities.  While such initiatives will increase expenses in the short-term, the opportunities for long-term benefit, including growth and expansion have never been stronger than they are at the present time.  Our team continues to grow in reputation and stature as the leading, most capable and trusted source of commercial loans, cash management, insurance services, and investment management in our region.  Customers want to deal with skilled, local, trusted professionals, who act in their best interest.”

Founder and Chairman of the Board George Duncan stated, “2009 presents community banks like Enterprise opportunities to add customers and talent. The overall shift in market forces underscores a potentially dramatic redirection in future customer relationships towards community banks.  In many ways, the times are similar to the early 1990s when we were in our infancy and we had the same challenges but tremendous opportunities.  Enterprise Bank continues to apply its consistent and disciplined lending strategy with ongoing investments in our products, customer services, employees and branch network.  We are committed to stimulating economic growth within our service communities of the Merrimack Valley and North Central regions of Massachusetts and South Central New Hampshire.  In essence, our role as a stable and trusted financial advisor is more important today than ever before.”

Results of Operations

For the year ended December 31, 2008, net interest income amounted to $42.2 million, compared to $40.7 million for 2007.  Net interest income for the quarter ended December 31, 2008 amounted to $11.2 million, compared to $10.3 million in the December 2007 quarter. The increases in net interest income over the comparable prior-year periods were due primarily to strong loan growth, which was partially offset by margin compression described further below. Average loan growth for the year-over-year and quarter-over-quarter periods amounted to $86.8 million and $100.2 million, respectively.

The Company’s year-to-date net interest margin decreased as a result of asset yields repricing downward, due to the market-rate reductions that have occurred since late 2007 as the Federal Reserve Board’s target rates have declined 500 basis points, including 175 basis points during the last quarter.  However, the Company’s strong loan growth throughout the year, along with reductions in funding costs, partially offset the reduction in asset yields. Due to tight credit markets and a highly-competitive marketplace for funding during the year, deposit costs declined at a slower pace than asset yields. However, the wholesale funding cost decline accelerated during the second half of the year, primarily as a result of reductions in Federal Home Loan Bank short-term funding rates. Net interest margin was 4.23% for the year ended December 31, 2008, compared to 4.48% for 2007.  Quarterly net interest margin was 4.24% for the three months ended December 31, 2008, compared to 4.27% and 4.36% for the quarters ended September 30, 2008 and December 31, 2007, respectively.

The provision for loan losses amounted to $2.5 million for the year compared to $1.0 million in 2007. The increase over the prior year was due primarily to loan growth and an increase in net charge-offs. Total loans increased $114.8 million, or 14%, since December 31, 2007. For the year ended December 31, 2008, the Company recorded net charge-offs of $781 thousand, compared to net charge-offs of $395 thousand for the year ended December 31, 2007.  In light of the current economic environment overall asset quality remains strong, with net charge-offs for the year amounting to 0.09% of average total loans, and non-performing assets to total assets of 0.73% at December 31, 2008, compared to 0.05% and 0.39%, respectively, in 2007.  The allowance for loan losses to total loans ratio was 1.61% at December 31, 2008, compared to 1.62% at December 31, 2007.

Non-interest income for the year ended December 31, 2008, amounted to $6.1 million compared to $10.1 million in the prior year.  The decrease was due primarily to the $3.7 million impairment charge on certain equity investments in the investment portfolio mentioned above and a reduction in net security gains, which were $305 thousand for the year-ended December 31, 2008, compared to $1.7 million for the year-ended

December 31, 2007. The impairment charge reflected the fourth quarter downturn in the stock market in general and allows for more discretion in managing these funds, which may include selling a portion of the investments in the first half of 2009. A sale would also ensure that, for tax purposes, a portion of the losses on sales could be applied against investment gains realized on the portfolio during the past two years, before the ability to carry back against these gains expires.  Excluding the impairment charge and security gains, non-interest income in 2008 increased $1.0 million, or 12%, over the prior year, due primarily to an increase in deposit service fee income.

Non-interest expense for the year ended December 31, 2008, amounted to $37.9 million, an increase of 9%, compared to $34.8 million for the year ended December 31, 2007. The increase in non-interest expense was related primarily to the Company’s strategic growth initiatives resulting in increases in the areas of compensation-related costs, advertising, and training expenses.  In addition, in 2008 the Company’s deposit insurance premiums increased due to changes in the FDIC insurance assessment rates, related to 2005 legislation which applied to all insured banks.

In 2008, the Company benefited from a decrease in its effective income tax rate; however, in the third quarter income taxes were impacted by approximately $130 thousand related to legislative changes in future tax rates applicable to Massachusetts financial institutions.

Key Financial Highlights

·Total assets were $1.18 billion at December 31, 2008 as compared to $1.06 billion at December 31, 2007, an increase of 12%.

·Total loans increased $114.8 million, or 14%, since December 31, 2007 amounting to $948.6 million at December 31, 2008.

·Total deposits, excluding brokered deposits, were $872.5 million at December 31, 2008 compared to $798.1 million at December 31, 2007, an increase of 9%.  Brokered deposits amounted to $75.4 million and $70.7 million on those respective dates.

·Investment assets under management amounted to $439.7 million at December 31, 2008 compared to $573.6 million at December 31, 2007, a decrease of 23%.  The decrease is attributable primarily to the effects of declines in the equity markets on investment account balances, as well as declines in sweep account balances during the period.

·Total assets under management amounted to $1.65 billion at both December 31, 2008 and December 31, 2007.

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 products, deposit and cash management products as well as investment management, trust and insurance services.  The Company’s headquarters and the bank’s main office are located at 222 Merrimack Street in Lowell, Massachusetts.  The Company’s primary market area is the Merrimack Valley and North Central regions of Massachusetts and South Central New Hampshire.  The Company has sixteen full-service branch offices located in the Massachusetts cities and towns of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Leominster, Methuen, Tewksbury, and Westford and Salem, New Hampshire.  The Company has also obtained regulatory approvals to establish a new branch in Derry, New Hampshire, and expects that this office will be open for business in 2009.

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, 2008 and 2007

(unaudited)

	Three Months Ended Dec. 31,					Year Ended Dec. 31,
(Dollars in thousands, except per share data)	2008			2007		2008			2007
Interest and dividend income:
Loans	$	14,233		$	15,129	$	57,387		$	59,065
Investment securities	1,595			1,520		6,022			5,671
Short-term investments	31			92		196			301
Total interest and dividend income	15,859			16,741		63,605			65,037
Interest expense:
Deposits	4,186			5,642		18,342			22,093
Borrowed funds	170			499		1,891			1,088
Junior subordinated debentures	294			294		1,177			1,177
Total interest expense	4,650			6,435		21,410			24,358
Net interest income	11,209			10,306		42,195			40,679
Provision for loan losses	465			650		2,505			1,000
Net interest income after provision for loan losses	10,744			9,656		39,690			39,679
Non-interest income (loss):
Investment advisory fees	742			788		3,181			3,177
Deposit service fees	979			781		3,805			2,848
Bank-owned life insurance	156			154		620			602
Other than temporary impairment on investment securities	(3,702		)	—		(3,702		)	—
Net gains on sales of investment securities	38			786		305			1,655
Gains on sales of loans	33			57		133			201
Other income	435			405		1,749			1,625
Total non-interest income (loss)	(1,319		)	2,971		6,091			10,108
Non-interest expense:
Salaries and employee benefits	5,506			5,099		22,454			21,044
Occupancy expenses	1,713			1,597		6,650			6,470
Audit, legal and other professional fees	316			406		1,412			1,487
Advertising and public relations	691			514		1,963			1,389
Deposit insurance premiums	183			27		720			104
Supplies and postage	214			192		899			896
Investment advisory and custodial expenses	85			114		359			498
Other operating expenses	902			819		3,427			2,956
Total non-interest expense	9,610			8,768		37,884			34,844
Income (Loss) before income taxes	(185		)	3,859		7,897			14,943
Provision for (benefit from) income taxes	(214		)	1,124		2,349			5,045
Net income	$	29		$	2,735	$	5,548		$	9,898
Basic earnings per share	$	0.004		$	0.35	$	0.70		$	1.27
Diluted earnings per share	$	0.004		$	0.34	$	0.69		$	1.25
Basic weighted average common shares outstanding	8,008,029			7,882,894		7,973,527			7,819,160
Diluted weighted average common shares outstanding	8,029,726			7,951,566		8,005,535			7,913,006

ENTERPRISE BANCORP, INC.

Consolidated Balance Sheets

(unaudited)

	December 31,		December 31,
(Dollars in thousands)	2008		2007
Assets
Cash and cash equivalents:
Cash and due from banks	$	21,479	$	24,930
Short-term investments	3,797		7,788
Total cash and cash equivalents	25,276		32,718
Investment securities at fair value	159,373		145,517
Loans, less allowance for loan losses of $15,269 and $13,545 at December 31, 2008 and 2007, respectively	933,372		820,274
Premises and equipment	21,651		19,296
Accrued interest receivable	5,357		5,777
Deferred income taxes, net	9,349		7,722
Bank-owned life insurance	13,290		12,736
Prepaid income taxes	1,034		378
Prepaid expenses and other assets	5,910		7,250
Core deposit intangible, net of amortization	209		342
Goodwill	5,656		5,656
Total assets	$	1,180,477	$	1,057,666
Liabilities and Stockholders’ Equity
Liabilities
Deposits	$	947,903	$	868,786
Borrowed funds	121,250		81,429
Junior subordinated debentures	10,825		10,825
Accrued expenses and other liabilities	7,546		6,245
Accrued interest payable	1,849		3,369
Total liabilities	1,089,373		970,654
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; 8,025,239 and, 7,912,715 shared issued and outstanding at December 31, 2008 and 2007, respectively	80		79
Additional paid-in capital	29,698		28,051
Retained earnings	60,200		58,527
Accumulated other comprehensive income	1,126		355
Total stockholders’ equity	91,104		87,012
Total liabilities and stockholders’ equity	$	1,180,477	$	1,057,666

ENTERPRISE BANCORP, INC.

Selected Consolidated Financial Data and Ratios

(unaudited)

	At or for the			At or for the
	year			year
	ended			ended
	December 31,			December 31,
(Dollars in thousands, except per share data)	2008			2007
Balance Sheet Items:
Total assets	$	1,180,477		$	1,057,666
Loans serviced for others	28,341			20,826
Investment assets under management	439,711			573,608
Total assets under management	$	1,648,529		$	1,652,100
Book value per share	$	11.35		$	11.00
Dividends per common share	$	0.36		$	0.32
Total capital to risk weighted assets	10.70		%	11.44		%
Tier 1 capital to risk weighted assets	9.45		%	10.19		%
Tier 1 capital to average assets	8.28		%	8.84		%
Allowance for loan losses to total loans	1.61		%	1.62		%
Non-performing assets	$	8,585		$	4,156
Non-performing assets to total assets	0.73		%	0.39		%
Income Statement Items:
Return on average assets	0.51		%	0.99		%
Return on average stockholders’ equity	6.26		%	12.11		%
Net interest margin (tax equivalent)	4.23		%	4.48		%