Enterprise Bancorp, Inc. Announces First Quarter 2010 Net Income of $2.9 Million

http://www.businesswire.com/news/home/20100422006058/en

LOWELL, Mass.--(Business Wire)--
Enterprise Bancorp, Inc. (the "Company") (NASDAQ: EBTC), parent of Enterprise
Bank, announced net income of $2.9 million for the three months ended March 31,
2010, compared to $1.5 million for the three months ended March 31, 2009, an
increase of 90%. Diluted earnings per share were $0.32 compared to $0.19 for the
same period in 2009, an increase of 68%.

As previously announced on April 20, 2010, the Company declared a quarterly
dividend of $0.10 per share to be paid on June 1, 2010, to shareholders of
record as of May 11, 2010, compared to a quarterly dividend of $0.095 per share
paid in June 2009. The quarterly dividend represents a 5.3% increase over the
2009 dividend rate.

Total deposits, excluding brokered deposits, increased $71.2 million, or 6%,
since December 31, 2009, representing an annualized growth rate of 26%. Since
March 31, 2009, total deposits, excluding brokered deposits have increased
$263.2 million, or 28%. Loans have increased by $8.4 million, or 1%, since
December 31, 2009 and $114.8 million, or 12%, since March 31, 2009.

Chief Executive Officer Jack Clancy commented, "We continue to successfully grow
deposits and loans, while we expand our branch network and invest in our
infrastructure, our communities and in our employees. Construction on our
permanent Derry, NH location is almost complete and we expect the new branch
will open on June 1, 2010. We are very pleased to be able to report strong
financial results while we continue to make investments to seize current market
opportunities, which will also position Enterprise for further long-term
growth."

Founder and Chairman of the Board George Duncan stated, "As a strong and
well-capitalized community bank, Enterprise is well positioned to continue to
take advantage of market opportunities to acquire new customers, increase market
share and expand geographically during the coming years. We believe that the
need and desire of local businesses, professionals, non profits and individuals
to do business with a stable, purpose-driven local community bank, like
Enterprise, is stronger than ever."

Results of Operations

The increase in net income for the quarter ended March 31, 2010, when compared
to the same period in 2009, was primarily due to increases in net interest
income and non-interest income and a decrease in the provision for loan losses,
partially offset by increases in non-interest expenses.

Net interest income for the quarter ended March 31, 2010 amounted to $13.2
million, compared to $11.2 million in the March 2009 quarter, an increase of
$2.0 million, or 18%. The increase in net interest income over the comparable
prior-year period was due primarily to strong loan growth. Average loan balances
increased $126.3 million, or 13%, for the quarter ended March 31, 2010 compared
to the first quarter in 2009. Additionally, net interest margin increased to
4.44% for the three months ended March 31, 2010, compared to 4.17% for the
quarter ended March 31, 2009. Net interest margin was 4.42% for the fourth
quarter of 2009.

The provision for loan losses amounted to $879 thousand for the three months
ended March 31, 2010 compared to $1.1 million for the same period in 2009. The
provision for loan losses was primarily impacted by the level of loan growth,
non-performing loans, and net charge-offs. Loan growth during the first quarter
of 2010 amounted to $8.4 million compared to $27.8 million for the same period
in 2009. For the year-to-date period ended March 31, 2010, the Company recorded
net charge-offs of $607 thousand, compared to net charge-offs of $386 thousand
for the period ended March 31, 2009. Annualized net charge-offs for the three
months ended March 31, 2010 amounted to 0.23% of average total loans, and
non-performing assets to total assets were 1.36% at March 31, 2010. The levels
of charge-offs and non-performing assets, which reflect more normalized levels
compared to the historic lows of recent years, are a function of the current
economic environment and remain favorable compared to peer levels. The allowance
for loan losses to total loans ratio was 1.69% at March 31, 2010, compared to
1.68% at December 31, 2009 and 1.64% at March 31, 2009.

Non-interest income for the three months ended March 31, 2010 amounted to $3.1
million, an increase of $718 thousand, or 30%, compared to the first quarter of
2009. Net gains on security sales and other than temporary impairment charges on
certain equity securities, combined, increased $287 thousand compared to the
quarter ended March 31, 2009. Investment advisory income increased $205 thousand
in the first quarter of 2010 over the same period in the prior year. The
increase in investment advisory income primarily relates to net asset growth,
both from market appreciation and new business, during the second half of 2009.

Non-interest expense for the three months ended March 31, 2010, amounted to
$11.1 million, an increase of $808 thousand, or 8%, compared to the same quarter
last year. The increase in non-interest expense was related primarily to the
Company`s strategic growth initiatives resulting in increases in
compensation-related costs and technology expenses.

Key Financial Highlights

* Total assets were $1.37 billion at March 31, 2010 as compared to $1.30 billion
at December 31, 2009, an increase of 5%.
* Total loans increased $8.4 million, or 1%, since December 31, 2009 amounting
to $1.09 billion at March 31, 2010.
* Total deposits, excluding brokered deposits, were $1.19 billion at March 31,
2010 compared to $1.12 billion at December 31, 2009, an increase of 6%. There
were no brokered deposits at March 31, 2010 and brokered deposits amounted to
$27.9 million at December 31, 2009.
* Investment assets under management amounted to $448.2 million at March 31,
2010 compared to $433.0 million at December 31, 2009, an increase of 3%. The
increase is attributable primarily to asset growth, both from new business and
market value appreciation, during the second half of 2009.
* Total assets under management amounted to $1.9 billion at March 31, 2010
compared to $1.8 billion at December 31, 2009.

Enterprise Bancorp, Inc. (the "Company"), is a Massachusetts corporation that
conducts substantially all of its operations through Enterprise Bank and Trust
Company, commonly referred to as Enterprise Bank, and has reported 82
consecutive profitable quarters. 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 Southern New Hampshire. Enterprise Bank has seventeen
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 in the New Hampshire towns of Derry 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
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 ended March 31, 2010 and 2009

(unaudited)

Three Months Ended March 31,
(Dollars in thousands, except per share data) 2010 2009

Interest and dividend income:
Loans $ 14,769 $ 13,620
Investment securities 1,090 1,583
Short-term investments 6 17
Total interest and dividend income 15,865 15,220

Interest expense:
Deposits 2,331 3,639
Borrowed funds 57 95
Junior subordinated debentures 294 294
Total interest expense 2,682 4,028

Net interest income 13,183 11,192

Provision for loan losses 879 1,102
Net interest income after provision for loan losses
12,304 10,090

Non-interest income:
Investment advisory fees 854 649
Deposit service fees 972 873
Income on bank-owned life insurance 156 155
Other than temporary impairment on investment securities (1 ) (758 )
Net gains on sales of investment securities 501 971
Gains on sales of loans 81 122
Other income 528 361
Total non-interest income 3,091 2,373

Non-interest expense:
Salaries and employee benefits 6,446 5,902
Occupancy and equipment expenses 1,307 1,335
Technology and telecommunications expenses 912 756
Audit, legal and other professional fees 267 274
Advertising and public relations expenses 526 546
Deposit insurance premiums 460 373
Supplies and postage expenses 196 202
Investment advisory and custodial expenses 136 103
Other operating expenses 883 834
Total non-interest expense 11,133 10,325

Income before income taxes 4,262 2,138
Provision for income taxes 1,376 620

Net income $ 2,886 $ 1,518

Basic earnings per share $ 0.32 $ 0.19

Diluted earnings per share $ 0.32 $ 0.19

Basic weighted average common shares outstanding 9,124,696 8,059,337

Diluted weighted average common shares outstanding 9,129,024 8,065,636

ENTERPRISE BANCORP, INC.

Consolidated Balance Sheets

(unaudited)

March 31, December 31, March 31,
(Dollars in thousands) 2010 2009 2009

Assets
Cash and cash equivalents:
Cash and due from banks $ 23,711 $ 25,851 $ 30,631
Short-term investments 61,279 6,759 42,231
Total cash and cash equivalents 84,990 32,610 72,862

Investment securities at fair value 139,870 139,109 118,941
Loans, less allowance for loan losses of $18,490 at March 31, 2010, $18,218 at December 31, 2009 and $15,985 at March 31, 2009, respectively 1,072,721 1,064,612 960,449
Premises and equipment 23,168 22,924 22,457
Accrued interest receivable 5,558 5,368 5,232
Deferred income taxes, net 10,253 10,345 9,448
Bank-owned life insurance 13,971 13,835 13,426
Prepaid income taxes - - 507
Prepaid expenses and other assets 9,806 9,466 5,908
Core deposit intangible, net of amortization 43 76 176
Goodwill 5,656 5,656 5,656

Total assets $ 1,366,036 $ 1,304,001 $ 1,215,062

Liabilities and Stockholders` Equity

Liabilities
Deposits $ 1,188,201 $ 1,144,948 $ 997,597
Borrowed funds 45,301 24,876 104,244
Junior subordinated debentures 10,825 10,825 10,825
Accrued expenses and other liabilities 10,080 14,270 8,919
Income taxes payable 454 98 -
Accrued interest payable 726 1,320 1,309

Total liabilities 1,255,587 1,196,337 1,122,894

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; 9,210,026, 9,090,518 and 8,151,781 shares issued and outstanding at March 31, 2010, December 31, 2009 and March 31, 2009, respectively

92 91 82
Additional paid-in capital 41,099 40,453 30,233
Retained earnings 67,017 65,042 60,955
Accumulated other comprehensive income 2,241 2,078 898

Total stockholders` equity 110,449 107,664 92,168

Total liabilities and stockholders` equity $ 1,366,036 $ 1,304,001 $ 1,215,062

ENTERPRISE BANCORP, INC.

Selected Consolidated Financial Data and Ratios

(unaudited)

At or for the At or for the At or for the
three months year three months
ended ended ended
March 31, December 31, March 31,
(Dollars in thousands, except per share data) 2010 2009 2009
Balance Sheet Items:
Total assets $ 1,366,036 $ 1,304,001 $ 1,215,062
Loans serviced for others 59,977 53,659 28,933
Investment assets under management 448,186 433,043 409,772
Total assets under management $ 1,874,199 $ 1,790,703 $ 1,653,767

Book value per share $ 11.99 $ 11.84 $ 11.31
Dividends per common share $ 0.100 $ 0.380 $ 0.095
Total capital to risk weighted assets 11.18 % 11.08 % 10.62 %
Tier 1 capital to risk weighted assets 9.88 % 9.77 % 9.36 %
Tier 1 capital to average assets 8.66 % 8.62 % 8.10 %
Allowance for loan losses to total loans 1.69 % 1.68 % 1.64 %
Non-performing assets $ 18,618 $ 21,695 $ 11,272
Non-performing assets to total assets 1.36 % 1.66 % 0.93 %

Income Statement Items (annualized):
Return on average assets 0.89 % 0.64 % 0.52 %
Return on average stockholders` equity 10.73 % 8.31 % 6.67 %
Net interest margin (tax equivalent) 4.44 % 4.28 % 4.17 %

Enterprise Bancorp, Inc.
Mary Ellen Fitzpatrick, 978-656-5520
Senior Vice President, Corporate Communications

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