Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Com ...

Business Operations - Enterprise Bancorp, Inc. operates as a community-focused commercial bank with six wholly owned subsidiaries[14]. - The Bank has 26 full-service branches across Massachusetts and New Hampshire, with a 27th branch expected to open in Q3 2022[19]. - The Company's primary lending focus includes commercial real estate, construction, and industrial loans, with a statutory lending limit of approximately $80.1 million to any individual borrower[34]. - The Company actively participates in the Paycheck Protection Program (PPP), providing federally guaranteed loans to support small businesses during the COVID-19 pandemic[40]. - The Company employs a seasoned commercial lending staff and utilizes an internal loan review function to monitor credit quality and compliance[28]. - The Bank's loan portfolio is managed to avoid concentration by industry and relationship size, thereby reducing credit risk exposure[26]. - The Company offers a range of commercial, residential, and consumer loan products, as well as wealth management services[22]. - The integrated branch network supports all product channels with state-of-the-art facilities and electronic banking capabilities[24]. - The Company continually examines new products and technologies to maintain a competitive mix of offerings tailored to customer needs[24]. - Management seeks to strengthen the Company's market position through organic growth and strategic expansion into neighboring markets[20]. - The Company participates in community development loan funds to provide small loans to local businesses, aiming to stimulate economic development and create jobs[45]. Loan Products - The Company originates conventional mortgage loans with loan-to-value ratios ranging from 75% for multi-family properties to 97% for single-family properties[47]. - Management may sell fixed and adjustable-rate residential mortgage loans based on interest rate projections and asset-liability management strategies[48]. - Home equity term loans are offered with maximum loan-to-value ratios generally up to 75%[50]. - The Company provides home equity revolving lines of credit with maximum loan-to-value ratios generally up to 80%[51]. - Consumer loans include secured and unsecured personal loans, with overdraft protection lines classified as loan balances[52]. Deposit Products - The Company offers a variety of competitive deposit products, including checking accounts and term certificates of deposit[54]. - The Company utilizes brokered deposits as an alternative to borrowed funds to support asset growth[58]. Capital Management - The investment portfolio is managed to provide liquidity for loan growth while ensuring maximum return consistent with safety and diversification[70]. - The Company believes its current capital is adequate to support ongoing operations and meets all capital adequacy requirements under Basel III[86]. - The Company has issued subordinated notes as part of its capital management strategy, with outstanding subordinated debt consisting of fixed-to-floating rate notes due in 2030[88]. - The Company is subject to regulatory restrictions on dividends, which cannot be paid if it would be unable to meet its debts or if total assets would fall below total liabilities[151]. - The Federal Reserve Board can prohibit dividends if the actions of the bank holding company are deemed unsafe or unsound[153]. - The ability to pay dividends is limited by the Bank's capital position and recent net income, requiring approval for dividends exceeding net profits[177]. - The interim final rule revised the definition of "eligible retained income" to help banking organizations manage capital distributions during the COVID-19 pandemic, allowing for a calculation based on net income over the preceding four quarters[178]. Regulatory Environment - The Company is subject to supervision and regulation by the Federal Reserve Board and the Massachusetts Division of Banks, which could materially affect its business[112]. - The Company’s consolidated assets are less than $10 billion, exempting it from certain restrictions of the Volcker Rule under the Dodd-Frank Act[124]. - The Company believes it currently satisfies all requirements to elect to become a financial holding company, but has no current intention to do so[125]. - Under the Basel III Rules, the minimum total risk-based capital ratio is 8.00%, with an additional capital conservation buffer of 2.50%, resulting in a total of 10.50%[145]. - As of December 31, 2021, the Company met all capital adequacy requirements under Basel III and was classified as "well-capitalized"[148]. - The Company has opted not to utilize the Community Bank Leverage Ratio framework and continues to follow Basel III capital requirements[150]. - The aggregate liability of the holding company of an "undercapitalized" bank is limited to the lesser of 5% of the institution's assets or the amount necessary to achieve adequate capitalization[130]. - The federal banking agencies require banks to maintain capital levels commensurate with the level of risk, especially for those experiencing internal growth or acquisitions[137]. - The Federal Reserve Board requires bank holding companies to pay cash dividends only if net income is sufficient to cover them, and minimum regulatory capital adequacy ratios are met[154]. - Bank holding companies must consult with the Federal Reserve Board before redeeming equity or capital instruments if it materially affects their capital base[155]. Competition and Market Position - The Company faces robust competition from national and larger regional banks, local savings banks, credit unions, and the evolving fintech industry, impacting its market share objectives[103]. - The Company is committed to maintaining asset quality and focuses on building long-term relationships rather than competing on individual transactions[104]. - The Company actively seeks to increase deposit market share and enhance customer experience through continuous reviews of deposit product offerings[105]. - The Company plans market expansion through the development of new branch locations to complement existing ones and expand its geographic footprint[106]. - Advances in technology and data analytics are expected to significantly impact the competitive landscape for financial services[107]. Compliance and Risk Management - The Bank received a "High Satisfactory" rating from the Division and "Satisfactory" from the FDIC on its most recent Community Reinvestment Act examination[179]. - As of December 31, 2021, the Bank's concentrations of commercial real estate loans were slightly below established regulatory levels, indicating effective credit risk management[189]. - The Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA) enacted in 2018 eases regulations for banks with less than $10 billion in assets, impacting the Company's operations[192]. - The Dodd-Frank Act significantly increased regulations on mortgage lending, requiring mortgage originators to ensure consumers can repay loans[197]. - The Home Mortgage Disclosure Act (HMDA) rules require expanded data collection for residential mortgage transactions, with certain exemptions for smaller institutions[198]. - The Dodd-Frank Act expanded UDAP laws to include UDAAP, which addresses unfair, deceptive, or abusive acts or practices in consumer finance[199]. - The Federal Reserve Board reviews incentive compensation arrangements of banking organizations to ensure they do not encourage excessive risk-taking[201]. - Publicly traded companies must provide shareholders a non-binding vote on executive compensation at least every three years[202]. - The Dodd-Frank Act prohibits excessive compensation for executives of depository institutions with assets exceeding $1 billion[203]. - The federal banking regulators proposed a rule to prohibit unreasonable compensation for senior executive officers and significant risk-takers[204]. - Financial institutions are expected to manage technology-related risks as part of their comprehensive risk management policies[205]. - The Gramm-Leach-Bliley Act requires banks to implement a comprehensive written information security program to protect customer information[206].

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201%20Financial%20Statements%20(unaudited)) The unaudited interim financial statements as of September 30, 2021, reflect the adoption of the CECL methodology [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $4.45 billion, driven by deposit growth, while total loans decreased due to PPP loan forgiveness Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$4,451,432** | **$4,014,324** | | Total cash and cash equivalents | $644,377 | $253,782 | | Net loans | $2,800,848 | $3,029,295 | | Total investment securities | $819,222 | $583,049 | | **Total Liabilities** | **$4,104,892** | **$3,679,898** | | Total deposits | $3,970,936 | $3,551,263 | | **Total Stockholders' Equity** | **$346,540** | **$334,426** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income decreased for Q3 2021 but increased significantly for the nine-month period due to higher net interest income Income Statement Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $35,879 | $33,531 | $105,901 | $95,953 | | Provision for Credit Losses | $28 | $1,575 | $747 | $10,397 | | Non-interest Income | $3,079 | $4,324 | $12,130 | $12,532 | | Non-interest Expense | $25,769 | $22,769 | $75,609 | $69,777 | | **Net Income** | **$9,832** | **$10,326** | **$31,323** | **$21,599** | | Diluted EPS | $0.81 | $0.87 | $2.60 | $1.81 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by $390.6 million, driven by a substantial rise in deposits and financing activities Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $34,820 | $26,744 | | Net cash used in investing activities | ($47,010) | ($565,559) | | Net cash provided by financing activities | $402,785 | $783,385 | | **Net increase in cash and cash equivalents** | **$390,595** | **$244,570** | [Notes to Unaudited Consolidated Interim Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Interim%20Financial%20Statements) Key disclosures include the adoption of CECL, loan portfolio composition, credit quality, and regulatory capital adequacy - Effective January 1, 2021, the Company adopted the CECL methodology for estimating allowances for credit losses, resulting in a **$6.5 million reduction to retained earnings**, net of tax[37](index=37&type=chunk)[64](index=64&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commercial real estate | $1,556,240 | $1,476,236 | | Commercial and industrial | $401,718 | $435,548 | | Commercial construction | $412,332 | $371,856 | | SBA PPP | $148,240 | $443,070 | | Residential mortgages | $239,960 | $252,995 | | **Total loans** | **$2,848,110** | **$3,073,860** | - The Allowance for Credit Losses (ACL) for loans stood at **$47.3 million**, or **1.66% of total loans**, as of September 30, 2021[115](index=115&type=chunk) - As of September 30, 2021, the Company and its bank subsidiary met the definition of **"well-capitalized"** under all applicable regulatory capital requirements[174](index=174&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, highlighting the impact of PPP loans and interest-rate swap terminations on performance [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Nine-month net income rose due to higher PPP-related interest income and lower credit loss provisions Key Performance Metrics | Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income (in millions) | $9.8 | $10.3 | $31.3 | $21.6 | | Diluted EPS | $0.81 | $0.87 | $2.60 | $1.81 | | Net Interest Margin (tax equiv.) | 3.39% | 3.46% | 3.48% | 3.63% | - Net interest income for Q3 2021 **increased by 7% YoY to $35.9 million**, benefiting from **$4.9 million in PPP-related income** and lower deposit interest expense[260](index=260&type=chunk) - Non-interest income for Q3 2021 included a **$1.8 million loss** from the termination of interest-rate swaps[259](index=259&type=chunk)[277](index=277&type=chunk) [Financial Condition](index=61&type=section&id=Financial%20Condition) Asset growth was fueled by a 14% increase in customer deposits, while PPP loan forgiveness reduced total loans - Total assets **increased by 11% to $4.45 billion** at September 30, 2021, from December 31, 2020[302](index=302&type=chunk) - Total loans **decreased by 7%** since year-end 2020, mainly due to PPP loan forgiveness; Core loans (non-GAAP) **grew by $69.1 million**[308](index=308&type=chunk) Asset Quality Ratios | Ratio | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Non-performing loans to total loans | 0.98% | 1.24% | | Non-performing assets to total assets | 0.68% | 0.95% | | ACL for loans to total loans | 1.66% | 1.45% | - Customer deposits **increased by $494.7 million (14%)** since December 31, 2020, attributed to PPP loan proceeds, government stimulus, and customers maintaining higher liquidity[345](index=345&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's asset sensitivity to interest-rate risk has increased significantly due to growth in short-term liquidity Net Interest Income Sensitivity Analysis (% Change) | Rate Shock | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | +400 bps | 14.35% | 6.40% | | +200 bps | 7.66% | 3.57% | | -100 bps | (5.16)% | (4.16)% | - The increased sensitivity to rising rates is primarily due to a significant increase in net short-term liquidity, which **grew to $597.7 million** at September 30, 2021, from $133.4 million at December 31, 2020[373](index=373&type=chunk)[374](index=374&type=chunk)[377](index=377&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The Company's principal executive officer and principal financial officer concluded that **disclosure controls and procedures were effective** as of September 30, 2021[379](index=379&type=chunk) - **No significant changes** to internal control over financial reporting occurred during the third quarter of 2021[380](index=380&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201%20Legal%20Proceedings) The Company is not party to any material legal proceedings outside of ordinary routine litigation - There are **no material pending legal proceedings** against the Company, only ordinary routine litigation[385](index=385&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors were reported, aside from potential pandemic-related economic stress - **No material changes** to risk factors were reported, except for the potential for heightened risk due to sustained economic stress or lagging effects from the COVID-19 pandemic[386](index=386&type=chunk)[387](index=387&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No company common stock was repurchased during the third quarter of 2021 - **No shares of common stock were repurchased** by the Company during the third quarter of 2021[388](index=388&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL data

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Com ...

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Enterprise Bancorp, Inc. is a bank holding company offering commercial, residential, and wealth management services in its regional market - **Enterprise Bancorp, Inc.** was organized in **1996** as the parent holding company of **Enterprise Bank and Trust Company**, which commenced banking operations in **1989**[14](index=14&type=chunk) - The Bank has five wholly-owned subsidiaries: **Enterprise Insurance Services, LLC**, **Enterprise Wealth Services, LLC**, and three Massachusetts security corporations (**Enterprise Security Corporation**, **Enterprise Security Corporation II**, and **Enterprise Security Corporation III**)[14](index=14&type=chunk) - The Company's services are managed as **one strategic unit**, representing its **only reportable operating segment**[15](index=15&type=chunk) [Organization](index=4&type=section&id=Organization) Enterprise Bancorp, Inc. operates as a bank holding company with five wholly-owned subsidiaries, managed as a single strategic unit - **Enterprise Bancorp, Inc.** was organized in **1996** as the parent holding company of **Enterprise Bank and Trust Company**, which commenced banking operations in **1989**[14](index=14&type=chunk) - The Bank has five wholly-owned subsidiaries: **Enterprise Insurance Services, LLC**, **Enterprise Wealth Services, LLC**, and three Massachusetts security corporations (**Enterprise Security Corporation**, **Enterprise Security Corporation II**, and **Enterprise Security Corporation III**)[14](index=14&type=chunk) - The Company's services are managed as **one strategic unit**, representing its **only reportable operating segment**[15](index=15&type=chunk) [Market Area](index=4&type=section&id=Market%20Area) The Company primarily serves Northern Massachusetts and Southern New Hampshire through its **26** existing and planned **27th** branch - The Company's primary market area includes **Northern Middlesex, Northern Essex, and Northern Worcester counties of Massachusetts**, and **Southern Hillsborough and Southern Rockingham counties in New Hampshire**[18](index=18&type=chunk) - **Enterprise** operates **26 full-service branches** across these regions, with a **27th branch** in **Londonderry, New Hampshire**, expected to open in **late 2021 or early 2022**[18](index=18&type=chunk) - Management actively pursues **organic growth and strategic expansion** within existing and neighboring geographic markets[19](index=19&type=chunk) [Products and Services](index=4&type=section&id=Products%20and%20Services) The Company's core business involves gathering deposits and investing in commercial loans and securities, offering diverse financial services - The Company's core business involves gathering deposits and investing primarily in **commercial loans and investment securities**, using **cash flows** for operations, product expansion, branch network growth, and stockholder dividends[21](index=21&type=chunk) - Services include **commercial, residential, and consumer loan products, deposit products, cash management, online/mobile/voice banking, commercial insurance, and wealth management**[21](index=21&type=chunk) [Lending Products](index=5&type=section&id=Lending%20Products) The Company specializes in commercial lending, managing its loan portfolio to mitigate **credit risk** through diversification - The Company specializes in lending to **business entities, non-profit organizations, professional practices, and individuals**, with a primary focus on **high-quality commercial relationships**[24](index=24&type=chunk) - Loan portfolio management aims to avoid concentration by industry, relationship size, and repayment source to mitigate **credit risk**[24](index=24&type=chunk) - Interest rates on loans can be **fixed or variable**, determined by **credit risk**, term, costs, borrower relationships, competitive pressures, and government regulations[25](index=25&type=chunk) [Deposit Products](index=8&type=section&id=Deposit%20Products) Deposits are the Company's principal funding source, offering various accounts with enhanced FDIC insurance and competitive rates - Deposits are the Company's **principal funding source**, offering **checking, savings, money market accounts, commercial sweep products, and CDs (1-36 months)**[51](index=51&type=chunk) - The Company provides **enhanced FDIC insurance coverage** on larger deposit balances through nationwide networks of reciprocating FDIC-insured banks[52](index=52&type=chunk) - Interest rates on deposits are set based on economic conditions, competition, liquidity needs, and asset-liability position, with **low-cost checking deposits** being a core funding strategy[53](index=53&type=chunk) [Cash Management Services](index=8&type=section&id=Cash%20Management%20Services) Commercial and public sector clients access diverse cash management services, including fraud reduction and automated investment sweeps - Commercial banking and public sector customers can access cash management services including **remote check deposit, lockbox, ACH origination, wire transfers, Positive Pay** for fraud reduction, account reconciliation, zero balance target transfers, automated investment sweeps, and commercial card/merchant services[55](index=55&type=chunk) - Investment sweep services include **third-party FDIC enhanced money markets or non-deposit mutual funds**, with balances swept into mutual funds **not representing Company obligations or FDIC insured**[55](index=55&type=chunk)[57](index=57&type=chunk) [Product Delivery Channels](index=10&type=section&id=Product%20Delivery%20Channels) The Company offers electronic banking via its website, mobile apps, and voice banking with Alexa, all secured by multi-layer authentication - Electronic banking capabilities are offered via the **Bank's website and mobile apps** for account viewing, transfers, bill payments, person-to-person payments, and check deposits[58](index=58&type=chunk) - **Voice banking service with Alexa** allows retail customers to access account balances and transaction history, and perform internal transfers[58](index=58&type=chunk) - Online, mobile, and voice banking tools use **multiple layers of customer authentication** to manage transaction and information risk[59](index=59&type=chunk) [Wealth Management and Wealth Services](index=10&type=section&id=Wealth%20Management%20and%20Wealth%20Services) The Company provides wealth advisory and management through **Enterprise Wealth Management** and **Enterprise Wealth Services**, overseen by a Board Committee - The Company provides wealth advisory and management services through **Enterprise Wealth Management** (**customized investment management and trust services**) and **Enterprise Wealth Services** (brokerage and management services via a third-party arrangement)[60](index=60&type=chunk)[63](index=63&type=chunk) - **Enterprise Wealth Management** uses an **open-architecture approach**, partnering with research firms to select high-performing mutual funds and independent investment management firms[61](index=61&type=chunk) - The **Enterprise Wealth Management Committee of the Board** oversees fiduciary and investment activities, client asset management, and reviews investment performance and strategic initiatives[64](index=64&type=chunk) [Insurance Services](index=10&type=section&id=Insurance%20Services) **Enterprise Insurance Services, LLC** offers a full array of commercial insurance products through a third-party arrangement - **Enterprise Insurance Services, LLC** engages in insurance sales through a third-party arrangement with **HUB International New England, LLC**, offering a **full array of insurance products** for businesses in the Company's market area[65](index=65&type=chunk) [Investment Activities](index=11&type=section&id=Investment%20Activities) The investment portfolio is crucial for asset-liability management, providing liquidity and aiming for maximum return with safety - The Company's investment portfolio is crucial for **asset-liability management**, providing **liquidity** for loan growth, deposit withdrawals, and maturities, while aiming for **maximum return consistent with safety and diversification**[68](index=68&type=chunk) - Investments are limited by regulation and internal policy to **high-quality debt securities**, with an **outside registered investment adviser** managing corporate and municipal bond portfolios[69](index=69&type=chunk) - As of **December 31, 2020**, debt securities were classified as **available-for-sale** (**fair value** changes in OCI), and equity securities at **fair value** (changes in **net income**)[71](index=71&type=chunk) [Other Sources of Funds](index=11&type=section&id=Other%20Sources%20of%20Funds) Beyond deposits, asset growth is funded by cash flows, borrowed funds from various sources, and subordinated debt - Beyond deposits, asset growth can be funded by **cash flows** from **loan/investment portfolios**, **borrowed funds** (**FHLB, FRB Discount Window, PPPLF, correspondent banks**), and **subordinated debt**[76](index=76&type=chunk) [Borrowed Funds](index=11&type=section&id=Borrowed%20Funds) The Company utilizes various borrowing capacities, including FHLB, FRB Discount Window, and PPPLF, for liquidity and funding - Total borrowing capacity includes arrangements with the **FHLB, FRB Discount Window, Paycheck Protection Program Liquidity Fund (PPPLF), and correspondent banks**[76](index=76&type=chunk) - **FHLB** membership provides borrowing capacity based on **pre-pledged collateral**, primarily used for **short-term liquidity or community development projects**[77](index=77&type=chunk)[79](index=79&type=chunk) - In **April 2020**, the Company gained access to the **PPPLF**, providing **non-recourse funding secured by PPP loans**, with advances matching the amount and term of pledged PPP loans[81](index=81&type=chunk) [Subordinated Debt](index=12&type=section&id=Subordinated%20Debt) The Company issued **fixed-to-floating rate subordinated notes** in **2015** and **2020**, qualifying as **Tier 2 capital** for regulatory purposes - The Company issued **fixed-to-floating rate subordinated notes** in **January 2015 and July 2020**, both **due in 2030** with **call features**, intended to qualify as **Tier 2 capital** for regulatory purposes[83](index=83&type=chunk) [Capital Resources](index=12&type=section&id=Capital%20Resources) Capital planning supports growth through retained earnings and stock option exercises, with the Company meeting all **Basel III** requirements - Capital planning considers current and future growth, with ongoing sources including **retained earnings, employee stock option exercises, and dividend reinvestment plan proceeds**[86](index=86&type=chunk) - As of **December 31, 2020**, the Company and the Bank met all **Basel III capital adequacy requirements** and qualified as "**well-capitalized**" under applicable regulations[87](index=87&type=chunk) [Patents, Trademarks, etc.](index=12&type=section&

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share EBTC NASDAQ Stock Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ...

PART I [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated interim financial statements, including balance sheets, income statements, and cash flows, detailing the impact of the COVID-19 pandemic and PPP on the company's financials [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets significantly increased to **$4.04 billion** by June 30, 2020, driven by a surge in loans, including PPP loans, and a substantial rise in deposits Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$4,037,229** | **$3,235,049** | | Total cash and cash equivalents | $254,763 | $63,794 | | Loans, net | $3,133,818 | $2,531,845 | | **Total Liabilities** | **$3,720,553** | **$2,938,408** | | Total Deposits | $3,648,108 | $2,786,730 | | **Total stockholders' equity** | **$316,676** | **$296,641** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income decreased to **$7.3 million** for Q2 2020 and **$11.3 million** for H1 2020, primarily due to a significant increase in the provision for loan losses offsetting net interest income growth Key Income Statement Data (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $32,526 | $28,778 | $62,422 | $56,862 | | Provision for loan losses | $2,675 | $955 | $8,822 | $555 | | **Net income** | **$7,256** | **$7,763** | **$11,273** | **$16,459** | | Diluted earnings per share | $0.61 | $0.66 | $0.95 | $1.39 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$14.1 million**, while investing activities used **$588.8 million** primarily for loans, funded by **$765.7 million** from financing activities, leading to a **$191.0 million** increase in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,093 | $13,362 | | Net cash used in investing activities | ($588,803) | ($51,630) | | Net cash provided by financing activities | $765,679 | $162,027 | | **Net increase in cash and cash equivalents** | **$190,969** | **$123,759** | [Notes to Unaudited Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Interim%20Financial%20Statements) The notes detail accounting policies, including the delay of CECL adoption and suspension of TDR accounting under the CARES Act, and provide breakdowns of loan portfolios, PPP loans, and allowance for loan losses - The Company elected to delay the adoption of the Current Expected Credit Loss (CECL) methodology under the CARES Act until the earlier of the end of the national emergency or December 31, 2020[42](index=42&type=chunk) - The Company is suspending Troubled Debt Restructuring (TDR) accounting for short-term payment deferrals on certain loans related to the COVID-19 pandemic, as permitted by the CARES Act[43](index=43&type=chunk) - As of June 30, 2020, the company had funded **2,636** Paycheck Protection Program (PPP) loans totaling **$505.6 million**, recording **$17.0 million** in related SBA processing fees being accreted into interest income[71](index=71&type=chunk)[72](index=72&type=chunk) - The allowance for loan losses increased to **$42.3 million** at June 30, 2020, from **$33.6 million** at year-end 2019, with the provision for loan losses for the first six months of 2020 surging to **$8.8 million** from **$555 thousand** in the prior-year period due to pandemic-related economic weakness[109](index=109&type=chunk)[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting the COVID-19 pandemic's impact, including declining net income due to higher loan loss provisions, strong asset and deposit growth from PPP, and net interest margin compression [Overview](index=50&type=section&id=Overview) Net income for H1 2020 declined to **$11.3 million** due to increased loan loss provisions, while PPP loans totaling **$505.6 million** significantly boosted assets and deposits, and **$594.8 million** in loan deferrals were granted Financial Highlights - Six Months Ended June 30 | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Income | $11.3 million | $16.5 million | | Diluted EPS | $0.95 | $1.39 | - The company funded **2,636** PPP loans totaling **$505.6 million** as of June 30, 2020, which significantly impacted asset and deposit growth[230](index=230&type=chunk) - As of June 30, 2020, short-term payment deferrals were granted on **1,130** loans amounting to **$594.8 million**, or **22%** of the loan portfolio (excluding PPP loans)[235](index=235&type=chunk) - On July 7, 2020, the Company completed a private placement of **$60.0 million** in subordinated notes to support regulatory capital and growth[237](index=237&type=chunk) [Financial Condition](index=55&type=section&id=Financial%20Condition) Total assets grew **25%** to **$4.04 billion**, driven by a **24%** increase in loans including PPP, and a **28%** rise in deposits, while the allowance for loan losses (ex-PPP) reached **1.58%** Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Commercial real estate | $1,471,586 | $1,394,179 | | Commercial and industrial | $454,455 | $501,227 | | Commercial construction | $404,008 | $317,477 | | SBA PPP loans | $505,557 | $— | | **Gross loans** | **$3,194,723** | **$2,568,562** | Asset Quality Ratios | Ratio | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Non-performing assets to total assets | 0.53% | 0.46% | | Allowance for loan losses to total loans | 1.33% | 1.31% | | Allowance for loan losses to non-performing loans | 198.38% | 227.57% | - Industries considered most at-risk from the pandemic (retail, restaurants, hotels, fitness centers) represent **13%** of total gross loans (ex-PPP) and **28%** of the total deferred balance[310](index=310&type=chunk) - The allowance for loan losses to total loans, excluding the government-guaranteed PPP loans, was **1.58%** at June 30, 2020[327](index=327&type=chunk) [Results of Operations](index=69&type=section&id=Results%20of%20Operations) Net interest income increased for both Q2 and H1 2020, driven by loan growth and PPP, but was significantly offset by a surge in the provision for loan losses, while non-interest expenses also rose Net Interest Margin (Tax-Equivalent) | Period | Q2 2020 | Q1 2020 | Q2 2019 | | :--- | :--- | :--- | :--- | | T/E Net Interest Margin | 3.59% | 3.89% | 3.96% | | T/E Net Interest Margin (ex-PPP) | 3.68% | N/A | N/A | - The provision for loan losses for Q2 2020 was **$2.7 million**, an increase of **$1.7 million** from Q2 2019, primarily due to general reserve increases related to the pandemic's economic impact[399](index=399&type=chunk) - For the six months ended June 30, 2020, the provision for loan losses was **$8.8 million**, compared to just **$555 thousand** for the same period in 2019[433](index=433&type=chunk) - Non-interest expense for Q2 2020 increased **12%** year-over-year to **$24.3 million**, driven by higher salaries and benefits (including PPP-related awards) and technology costs[404](index=404&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with its net interest income simulation model indicating increased asset sensitivity as of June 30, 2020, due to higher liquidity and near-zero deposit rates Net Interest Income Sensitivity Analysis (% Change over 24 Months) | Scenario | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Rates Rise 400 Bps | +4.93% | +0.77% | | Rates Rise 200 Bps | +2.75% | +0.83% | | Rates Decline 100 Bps | -3.14% | -1.24% | - The company's interest rate risk profile has become more asset-sensitive since year-end 2019, primarily due to an increase in on-balance sheet liquidity and deposit rates having limited capacity for further decline[457](index=457&type=chunk) [Item 4. Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no significant changes to internal control over financial reporting during Q2 2020 - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2020[463](index=463&type=chunk) - No significant changes were made to the Company's internal control over financial reporting during the second quarter of 2020[466](index=466&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending legal proceedings beyond routine litigation incidental to its business operations - The Company is not involved in any material pending legal proceedings outside of ordinary routine litigation[469](index=469&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) Existing risk factors are heightened by the COVID-19 pandemic, including increased credit losses, PPP-related risks, market volatility, liquidity constraints, and elevated operational and cybersecurity risks from remote work - The COVID-19 pandemic has heightened existing risk factors, potentially leading to a material adverse impact on credit, collateral, customer demand, funding, and operations[470](index=470&type=chunk) - The company faces heightened credit risk as the pandemic may cause customers to be unable to make scheduled loan payments, potentially leading to significant delinquencies and credit losses[472](index=472&type=chunk) - Participation in the Paycheck Protection Program (PPP) introduces risks, such as holding loans at unfavorable rates if forgiveness is not granted, and potential credit losses if the SBA does not honor its guarantee on defaulted loans[474](index=474&type=chunk) - Increased remote work due to the pandemic elevates technology and cybersecurity risks, including phishing, malware attacks, and potential disruptions to IT infrastructure[484](index=484&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2020, the company repurchased **1,633** common shares at an average price of **$26.01** per share, primarily for employee tax obligations upon restricted stock vesting Common Stock Repurchases (Q2 2020) | Month | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April | 1,633 | $26.01 | | May | — | — | | June | — | — | [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and financial data in Inline XBRL format - Exhibits filed with the report include officer certifications under SEC rules 13a-14(a) and 18 U.S.C. § 1350, as well as financial data formatted in Inline XBRL[492](index=492&type=chunk)