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| 8-K - 8-K - ENTERPRISE BANCORP INC /MA/ | a8-kx12x31x14financialpres.htm |
Exhibit 99
Contact Info: James A. Marcotte, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5614
Enterprise Bancorp, Inc. Announces 2014 Asset, Loan, Deposit and Net Income Growth of 9%, 10%, 6% and 8%, Respectively
LOWELL, MA-(GlobeNewswire)-(January 29, 2015) - Enterprise Bancorp, Inc. (the “Company”) (NASDAQ: EBTC), parent of Enterprise Bank, announces net income for the year ended December 31, 2014 amounted to $14.7 million, an increase of $1.1 million, or 8%, compared to the year ended December 31, 2013. Diluted earnings per share were $1.44 for the year ended December 31, 2014, an increase of 6% compared to the year ended December 31, 2013. Net income for the three months ended December 31, 2014 amounted to $4.0 million, an increase of $516 thousand, or 15%, compared to the same three-month period in 2013. Diluted earnings per share were $0.39 for the three-month period ended December 31, 2014, an increase of 11% compared to the same period in 2013.
As previously announced on January 20, 2015, the Company declared a quarterly dividend of $0.125 per share to be paid on March 2, 2015 to shareholders of record as of February 9, 2015. The quarterly dividend represents a 4.2% increase over the 2014 dividend rate.
Chief Executive Officer Jack Clancy commented, “Total assets now exceed $2 billion. In 2014, loans increased by $149 million, or 10%, deposits, excluding brokered deposits, increased by $99 million, or 6%, and average deposits, excluding brokered deposits, increased $124 million, or 8%. Our growth and operating results continue to be driven by the collective efforts and contributions of our dedicated Enterprise team through active community involvement, relationship building and a customer-focused mindset, market expansion, and our progressive product and service offerings. Our comprehensive and progressive services include advanced commercial lending, cash management, digital banking, wealth management, trust services and insurance services. Strategically, our focus remains on organic growth and continually planning for and investing in our future.”
President Richard Main added, “The deposits that are made at Enterprise Bank become loans to the businesses and non-profit organizations that sustain our local economy and provide funding for the mortgages that strengthen and stabilize the neighborhoods in which we all live. We are proud to say, since our inception 26 years ago, Enterprise Bank has now made over $6 billion in loans to our local businesses, non-profits and individuals in the communities we serve.”
Founder and Chairman of the Board George Duncan commented, “We continue to have strong growth and the December quarter represents our 101st consecutive profitable quarter. These are significant achievements. This stability in earnings and our track record of growth through both good and bad times have allowed us to continue to be a constant driving force in the market, which we believe helps foster our success. We have an unwavering commitment to help drive our regional economy by assisting businesses and non-profits with the resources they need to grow their enterprise and to support our communities by making better places to live and work.”
Results of Operations
The Company's 2014 growth has contributed to increases in net interest income, non-interest income and non-interest expenses in both the year and the current quarter, as compared to the same periods in 2013. Net income also benefited from an increase in net gains on sales of investment securities and a lower loan loss provision, as compared to the 2013 periods.
Net interest income for the year ended December 31, 2014 amounted to $71.2 million, an increase of $5.4 million, or 8%, compared to the year ended December 31, 2013. Net interest income for the three months ended December 31, 2014 amounted to $18.8 million, an increase of $1.6 million, or 9%, compared to the same period in 2013. This increase in net interest income was due primarily to loan growth, partially offset by a decrease in tax equivalent net interest margin (“margin”). Average loan balances (including loans held for sale) increased $145.7 million and $156.3 million for the year and three months ended December 31, 2014, respectively, compared to the same 2013 period averages. Margin was 4.02% for the year ended December 31, 2014, compared to 4.07% for the
year ended December 31, 2013. Margin was 4.01% for the quarter ended December 31, 2014, which is relatively consistent with the quarterly margin of 4.02% at September 30, 2014 and down slightly from 4.04% at December 31, 2013.
For the years ended December 31, 2014 and 2013, the provision for loan losses amounted to $1.4 million and $3.3 million, respectively. For the quarters ended December 31, 2014 and 2013, the provision for loan losses amounted to $230 thousand and $1.4 million, respectively. In determining the provision to the allowance for loan losses, management takes into consideration the level of loan growth and an estimate of credit risk, which includes such items as adversely classified and non-performing loans, the estimated specific reserves needed for impaired loans, the level of net charge-offs, and the estimated impact of current economic conditions on credit quality. Loan growth for the year ended December 31, 2014 was $148.5 million, compared to $164.4 million during the year ended December 31, 2013. Total non-performing loans as a percentage of total loans declined to 1.02% at December 31, 2014, compared to 1.20% at December 31, 2013. The balance of the allowance for loan losses allocated to impaired loans amounted to $2.2 million at December 31, 2014, compared to $4.4 million at December 31, 2013. For the years ended December 31, 2014 and December 31, 2013, the Company recorded net charge-offs of $1.2 million and $566 thousand, respectively. The majority of the current charge-offs were previously allocated specific reserves on commercial relationships for which management deemed collectability of amounts due was unlikely based on current realizable collateral values. This reduction in specific reserves, a lower level of loan growth in the current year, and improving credit characteristics of the portfolio contributed to the decline in the 2014 provision for loan losses and the overall allowance to total loan ratio at December 31, 2014, compared to the prior year. The allowance for loan losses to total loans ratio was 1.62% at December 31, 2014 and 1.77% at December 31, 2013.
Non-interest income for the year ended December 31, 2014 amounted to $14.4 million, an increase of $640 thousand, or 5%, compared to the year ended December 31, 2013. Non-interest income for the three months ended December 31, 2014 amounted to $4.1 million, an increase of $717 thousand, or 21%, compared to the same period in 2013. The increase in non-interest income for the year resulted primarily from increases in net gains on sales of investment securities, investment advisory fee income, deposit and interchange fee income and miscellaneous other income, partially offset by lower levels of gains on loan sales in the current year. In the prior year, other income also included gains of $121 thousand on other real estate owned ("OREO") sales. The increase in non-interest income for the quarter was due primarily to increases in net gains on sales of investment securities.
For the year ended December 31, 2014, non-interest expense amounted to $62.0 million, an increase of $6.2 million, or 11%, over the prior year. Non-interest expense for the quarter ended December 31, 2014 amounted to $16.6 million, an increase of $2.5 million, or 18%, compared to the same period in the prior year. Increased expenses over the prior year related to salaries and benefits, occupancy, technology, advertising and public relations and miscellaneous other expenses were due primarily to the Company's strategic growth initiatives. The current quarter also included increased advertising and public relations expenses, due to the timing of our community recognition event, while salaries and benefits expenses included a net cost of approximately $161 thousand compared to a net benefit of $337 thousand during the same quarter in 2013, due primarily to the effect of changing interest rates on certain accrued benefit plans.
Key Financial Highlights
▪ | Total assets amounted to $2.02 billion at December 31, 2014 as compared to $1.85 billion at December 31, 2013, an increase of $172.3 million, or 9%. Since September 30, 2014, total assets increased $59.5 million, or 3%. |
▪ | Total loans amounted to $1.67 billion at December 31, 2014, an increase of $148.5 million, or 10%, since December 31, 2013. Since September 30, 2014, total loans increased $59.8 million, or 4%. |
▪ | Total deposits, excluding brokered deposits, were $1.68 billion at December 31, 2014 as compared to $1.58 billion at December 31, 2013, an increase of $98.9 million, or 6%. Since September 30, 2014, total deposits, excluding brokered deposits, were relatively flat. Brokered deposits were $85.2 million at both December 31, 2014 and September 30, 2014 and $51.6 million at December 31, 2013. |
▪ | Investment assets under management amounted to $674.6 million at December 31, 2014 as compared to $667.3 million at December 31, 2013, an increase of $7.3 million, or 1%. Since September 30, 2014, investment assets under management increased $7.9 million, or 1%. |
▪ | Total assets under management amounted to $2.76 billion at December 31, 2014, compared to $2.59 billion at December 31, 2013, an increase of $171.0 million, or 7%. Since September 30, 2014, total assets under management increased $71.0 million, or 3%. |
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 Enterprise Bank and its subsidiaries, the Company offers a range of commercial and consumer loan products, deposit and cash management products as well as investment advisory and wealth management, 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 Southern New Hampshire. Enterprise Bank has 22 full-service branch offices located in the Massachusetts cities and towns of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough and Westford and in the New Hampshire towns of Derry, Hudson, Nashua, Pelham and Salem.
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 reference 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 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 reports filed with or furnished to the Securities and Exchange Commission (the "SEC"), including 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, except as required by applicable law.
ENTERPRISE BANCORP, INC.
Consolidated Balance Sheets
(unaudited)
(Dollars in thousands) | December 31, 2014 | December 31, 2013 | |||||||
Assets | |||||||||
Cash and cash equivalents: | |||||||||
Cash and due from banks | $ | 30,044 | $ | 41,362 | |||||
Interest-earning deposits | 10,102 | 10,153 | |||||||
Fed funds sold | — | 2,218 | |||||||
Total cash and cash equivalents | 40,146 | 53,733 | |||||||
Investment securities at fair value | 245,065 | 215,369 | |||||||
Federal Home Loan Bank stock | 3,357 | 4,324 | |||||||
Loans held for sale | 2,371 | 1,255 | |||||||
Loans, less allowance for loan losses of $27,121 at December 31, 2014 and $26,967 at December 31, 2013 | 1,645,483 | 1,497,089 | |||||||
Premises and equipment | 30,370 | 29,891 | |||||||
Accrued interest receivable | 6,733 | 6,186 | |||||||
Deferred income taxes, net | 12,852 | 13,927 | |||||||
Bank-owned life insurance | 16,315 | 15,902 | |||||||
Prepaid income taxes | 770 | 443 | |||||||
Prepaid expenses and other assets | 13,110 | 6,150 | |||||||
Goodwill | 5,656 | 5,656 | |||||||
Total assets | $ | 2,022,228 | $ | 1,849,925 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Liabilities | |||||||||
Deposits | $ | 1,768,546 | $ | 1,635,992 | |||||
Borrowed funds | 58,900 | 36,534 | |||||||
Junior subordinated debentures | 10,825 | 10,825 | |||||||
Accrued expenses and other liabilities | 16,441 | 14,675 | |||||||
Accrued interest payable | 566 | 565 | |||||||
Total liabilities | 1,855,278 | 1,698,591 | |||||||
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; 10,207,943 shares issued and outstanding at December 31, 2014 (including 157,694 shares of unvested participating restricted awards) and 9,992,560 shares issued and outstanding at December 31, 2013 (including 170,365 shares of unvested participating restricted awards) | 102 | 100 | |||||||
Additional paid-in capital | 57,130 | 52,936 | |||||||
Retained earnings | 105,951 | 96,153 | |||||||
Accumulated other comprehensive income | 3,767 | 2,145 | |||||||
Total stockholders’ equity | 166,950 | 151,334 | |||||||
Total liabilities and stockholders’ equity | $ | 2,022,228 | $ | 1,849,925 | |||||
ENTERPRISE BANCORP, INC.
Consolidated Statements of Income
(unaudited)
Three months ended December 31, | Year ended December 31, | ||||||||||||||
(Dollars in thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Interest and dividend income: | |||||||||||||||
Loans and loans held for sale | $ | 18,737 | $ | 17,543 | $ | 71,854 | $ | 67,673 | |||||||
Investment securities | 1,300 | 954 | 4,504 | 3,381 | |||||||||||
Other interest-earning assets | 31 | 28 | 115 | 68 | |||||||||||
Total interest and dividend income | 20,068 | 18,525 | 76,473 | 71,122 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 997 | 1,015 | 4,028 | 4,058 | |||||||||||
Borrowed funds | 5 | 4 | 38 | 96 | |||||||||||
Junior subordinated debentures | 294 | 294 | 1,177 | 1,177 | |||||||||||
Total interest expense | 1,296 | 1,313 | 5,243 | 5,331 | |||||||||||
Net interest income | 18,772 | 17,212 | 71,230 | 65,791 | |||||||||||
Provision for loan losses | 230 | 1,379 | 1,395 | 3,279 | |||||||||||
Net interest income after provision for loan losses | 18,542 | 15,833 | 69,835 | 62,512 | |||||||||||
Non-interest income: | |||||||||||||||
Investment advisory fees | 1,167 | 1,122 | 4,618 | 4,285 | |||||||||||
Deposit and interchange fees | 1,309 | 1,270 | 5,036 | 4,788 | |||||||||||
Income on bank-owned life insurance, net | 100 | 113 | 413 | 459 | |||||||||||
Net gains on sales of investment securities | 789 | 208 | 1,619 | 1,239 | |||||||||||
Gains on sales of loans | 123 | 64 | 406 | 792 | |||||||||||
Other income | 661 | 655 | 2,340 | 2,229 | |||||||||||
Total non-interest income | 4,149 | 3,432 | 14,432 | 13,792 | |||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 10,177 | 8,304 | 38,029 | 33,551 | |||||||||||
Occupancy and equipment expenses | 1,634 | 1,527 | 6,515 | 6,035 | |||||||||||
Technology and telecommunications expenses | 1,323 | 1,206 | 5,167 | 4,647 | |||||||||||
Advertising and public relations expenses | 996 | 661 | 2,928 | 2,708 | |||||||||||
Audit, legal and other professional fees | 401 | 478 | 1,695 | 1,742 | |||||||||||
Deposit insurance premiums | 318 | 298 | 1,169 | 1,118 | |||||||||||
Supplies and postage expenses | 277 | 248 | 1,053 | 967 | |||||||||||
Investment advisory and custodial expenses | 143 | 146 | 552 | 540 | |||||||||||
Other operating expenses | 1,377 | 1,260 | 4,923 | 4,516 | |||||||||||
Total non-interest expense | 16,646 | 14,128 | 62,031 | 55,824 | |||||||||||
Income before income taxes | 6,045 | 5,137 | 22,236 | 20,480 | |||||||||||
Provision for income taxes | 2,045 | 1,653 | 7,585 | 6,951 | |||||||||||
Net income | $ | 4,000 | $ | 3,484 | $ | 14,651 | $ | 13,529 | |||||||
Basic earnings per share | $ | 0.39 | $ | 0.35 | $ | 1.45 | $ | 1.37 | |||||||
Diluted earnings per share | $ | 0.39 | $ | 0.35 | $ | 1.44 | $ | 1.36 | |||||||
Basic weighted average common shares outstanding | 10,175,645 | 9,974,528 | 10,118,762 | 9,862,678 | |||||||||||
Diluted weighted average common shares outstanding | 10,279,099 | 10,065,286 | 10,209,243 | 9,950,609 | |||||||||||
ENTERPRISE BANCORP, INC.
Selected Consolidated Financial Data and Ratios
(unaudited)
(Dollars in thousands, except per share data) | At or for the year ended December 31, 2014 | At or for the year ended December 31, 2013 | ||||||||
BALANCE SHEET AND OTHER DATA | ||||||||||
Total assets | $ | 2,022,228 | $ | 1,849,925 | ||||||
Loans serviced for others | 64,122 | 72,711 | ||||||||
Investment assets under management | 674,604 | 667,330 | ||||||||
Total assets under management | $ | 2,760,954 | $ | 2,589,966 | ||||||
Book value per share | $ | 16.35 | $ | 15.14 | ||||||
Dividends paid per common share | $ | 0.48 | $ | 0.46 | ||||||
Total capital to risk weighted assets | 11.27 | % | 11.35 | % | ||||||
Tier 1 capital to risk weighted assets | 9.93 | % | 10.00 | % | ||||||
Tier 1 capital to average assets | 8.41 | % | 8.48 | % | ||||||
Allowance for loan losses to total loans | 1.62 | % | 1.77 | % | ||||||
Non-performing assets | $ | 17,997 | $ | 18,460 | ||||||
Non-performing assets to total assets | 0.89 | % | 1.00 | % | ||||||
INCOME STATEMENT DATA | ||||||||||
Return on average total assets | 0.76 | % | 0.78 | % | ||||||
Return on average stockholders’ equity | 9.20 | % | 9.32 | % | ||||||
Net interest margin (tax equivalent) | 4.02 | % | 4.07 | % | ||||||