Enterprise Bank: Enterprise Bancorp, Inc. Announces First Quarter Financial Results

LOWELL, Mass., April 17, 2025 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. ("Enterprise") EBTC , parent of Enterprise Bank, announced its financial results for the three months ended March 31, 2025. Net income amounted to $10.4 million, or $0.84 per diluted common share, for the three months ended March 31, 2025, compared to $10.7 million, or $0.86 per diluted common share, for the three months ended December 31, 2024 and $8.5 million, or $0.69 per diluted common share, for the three months ended March 31, 2024. On December 9, 2024, Enterprise announced its intention to merge with Rockland Trust Company, a wholly owned subsidiary of Independent Bank Corp. INDB . The proposed merger is expected to close in the second half of 2025, subject to customary closing conditions, including regulatory approvals. As previously announced, Enterprise shareholders approved of the proposed merger on April 3, 2025. No vote of Independent Bank Corp. shareholders is required. Selected financial results at or for the quarter ended March 31, 2025, compared to December 31, 2024, were as follows: The returns on average assets and average equity were 0.87% and 11.45%, respectively. Tax-equivalent net interest margin (non-GAAP) ("net interest margin") was 3.32%. Total loans amounted to $4.05 billion, an increase of 1.7%. Total customer deposits (non-GAAP) amounted to $4.15 billion, a decrease of 0.9%. Wealth assets under management and administration amounted to $1.51 billion, a decrease of 1.6%. Chief Executive Officer Steven Larochelle commented, "As we continue to work toward the upcoming merger with Rockland Trust, I am pleased to announce our team delivered strong results in the first quarter. Loan growth was solid at 1.7% for the quarter and 11% for the last twelve months. Operating results compared to the prior year quarter were positively impacted by net interest income growth of 10% resulting from strong loan growth and an increase in net interest margin." Executive Chairman & Founder George Duncan stated, "Our anticipated merger with Rockland Trust has been well received by our shareholders, customers and communities with shareholders approving the merger on April 3 rd . The planning for our integration into Rockland Trust is going well and the anticipated synergies and cultural alignment of our two banks remains attractive." Net Interest Income Net interest income for the three months ended March 31, 2025, amounted to $38.7 million, an increase of $3.5 million, or 10%, compared to the three months ended March 31, 2024. The increase was due primarily to an increase in loan interest income of $6.6 million, partially offset by increases in deposit interest expense of $1.0 million and borrowings interest expense of $1.0 million as well as a decrease in income on other interest-earning assets of $637 thousand. Net Interest Margin Net interest margin for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, amounted to 3.32%, 3.29% and 3.20%, respectively. During the first quarter of 2025, the Company sold non-performing loans with a net book value of $956 thousand, resulting in net recoveries of $461 thousand and loan interest income of $486 thousand. The sale of non-performing loans impacted both loan yields and net interest margin favorably by 5 basis points for the quarter ended March 31, 2025. Three months ended - March 31, 2025, compared to March 31, 2024 The increase in net interest margin was due to loan growth and, to a lesser extent, an increase in loan yields, partially offset by increases in the average balance of funding liabilities and funding costs. The increase in interest-earning asset yields of 21 basis points was due primarily to loan repricing and originations at higher interest rates, partially offset by an increase in funding costs of 9 basis points driven by higher market rates and increases in certificate of deposits and borrowed funds. Provision for Credit Losses The provision for credit losses for the three-month periods ended March 31, 2025 and March 31, 2024, are presented below: Three months ended Increase / (Decrease) (Dollars in thousands) March 31, 2025 March 31, 2024 Provision for credit losses on loans - collectively evaluated $ 685 $ 417 $ 268 Provision for credit losses on loans - individually evaluated (565 ) 1,451 (2,016 ) Provision for credit losses on loans 120 1,868 (1,748 ) Provision for unfunded commitments 211 (1,246 ) 1,457 Provision for credit losses $ 331 $ 622 $ (291 ) The provision for credit losses on collectively evaluated loans of $685 thousand for the quarter ended March 31, 2025, resulted mainly from loan growth, partially offset by net recoveries, which were primarily from the sale of non-performing loans noted above. The decrease in the provision for credit losses of $291 thousand, compared to the prior year quarter, was due primarily to a net decrease in reserves on individually evaluated loans of $2.0 million, partially offset by an increase in reserves for unfunded commitments of $1.5 million. The decrease in reserves on individually evaluated loans was due primarily to two commercial relationships that experienced improvement in their collateral valuation compared to the prior year period, while the increase in reserves for unfunded commitments resulted primarily from an increase in off-balance sheet commitments that required a reserve. Non-Interest Income Non-interest income for the three months ended March 31, 2025, amounted to $5.2 million, a decrease of $307 thousand, or 6%, compared to the three months ended March 31, 2024. The decrease was due primarily to a decrease in gains on equity securities of $766 thousand, partially offset by an increase in wealth management fees of $247 thousand. Non-Interest Expense Non-interest expense for the three months ended March 31, 2025, amounted to $29.9 million, an increase of $1.0 million, or 4%, compared to the three months ended March 31, 2024. The increase was due primarily to increases in salaries and employee benefits expense of $760 thousand and merger-related expenses of $290 thousand. Income Taxes The effective tax rate for the three months ended March 31, 2025, amounted to 23.3%, compared to 23.7% for the three months ended March 31, 2024. Balance Sheet Total assets amounted to $4.90 billion at March 31, 2025, compared to $4.83 billion at December 31, 2024, an increase of 2%. Total investm e nt securities at fair value amounted to $603.9 million at March 31, 2025, compared to $593.6 million at December 31, 2024, an increase of 2%. The increase during the three months ended March 31, 2025, was largely attributable to a decrease in unrealized losses on debt securities resulting from decreases in market interest rates during the period, partially offset by principal pay-downs, calls and maturities. Unrealized losses on debt securities amounted to $79.9 million at March 31, 2025, compared to $101.8 million at December 31, 2024, a decrease of 22%. Total loans amounted to $4.05 billion at March 31, 2025, compared to $3.98 billion at December 31, 2024, an increase of 2%. The increase during the three months ended March 31, 2025, was due primarily to an increase in commercial real estate loans of $70.2 million. Total deposits amounted to $4.30 billion at March 31, 2025, compared to $4.19 billion at December 31, 2024, an increase of 3%. The increase during the three months ended March 31, 2025, was due primarily to an increase in brokered deposits of $150.0 million. Excluding brokered deposits, total deposits decreased $37.0 million during the first quarter of 2025. Total borrowed funds amounted to $94.5 million at March 31, 2025, compared to $153.1 million at December 31, 2024, a decrease of 38%. The decrease during the three months ended March 31, 2025, resulted primarily from the increase in brokered deposits during the period. Total shareholders' equity amounted to $385.4 million at March 31, 2025, compared to $360.7 million at December 31, 2024, an increase of 7%. The increase during the three months ended March 31, 2025, was due primarily to a decrease in the accumulated other comprehensive loss of $17.0 million and an increase in retained earnings of $7.3 million. Credit Quality Selected credit quality metrics at March 31, 2025, compared to December 31, 2024, were as follows: The allowance for credit losses ("ACL") for loans amounted to $64.0 million, or 1.58% of total loans, compared to $63.5 million, or 1.59% of total loans. The decrease in the ACL for loans to total loan ratio was due primarily to a decrease in reserves on individually evaluated loans. The reserve for unfunded commitments (included in other liabilities) amounted to $4.6 million, compared to $4.4 million. The increase was driven primarily by an increase in off-balance sheet commitments that required a reserve. Non-performing loans amounted to $28.5 million, or 0.70% of total loans, compared to $26.7 million, or 0.67% of total loans. Net recoveries for the three months ended March 31, 2025, amounted to $424 thousand, or 0.04% of average total loans, which included $461 thousand in recoveries from the sale of non-performing loans noted above. Net charge-offs for the three months ended March 31, 2024, amounted to $122 thousand, or 0.01% of average total loans. Wealth Management Wealth assets under management and administration, which are not carried as assets on the Company's consolidated balance sheets, amounted to $1.51 billion at March 31, 2025, a decrease of $24.7 million, or 2%, compared to December 31, 2024, resulting primarily from a decrease in market values. 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 142 consecutive profitable quarters. Enterprise Bank is principally engaged in the business of attracting deposits from the general publ