Enterprise Bancorp(EBTC) - 2024 Q3 - Quarterly Report

Loan Portfolio and Credit Quality - The total loan portfolio amounts to $3,858,940,000, with a significant decrease from$6,358,660,000 in the previous period[47] - Current period charge-offs total $308,000, showing an increase from$470,000 in the previous period[47] - The pass-rated loans in commercial real estate owner-occupied category decreased to $35,994,000 from$93,047,000[47] - The total commercial real estate non-owner-occupied loans pass rating is $114,663,000, down from$143,443,000[47] - The commercial and industrial loans pass rating stands at $55,028,000, a decrease from$64,558,000[47] - The residential mortgages pass rating decreased to $52,699,000 from$80,896,000[47] - Home equity loans pass rating is $356,000, down from$457,000[47] - Consumer loans pass rating increased to $3,285,000 from$2,197,000[47] - The total current period charge-offs for consumer loans is $59,000, up from$3,000[47] - The company continues to monitor internal credit quality indicators to minimize credit losses[45] - Total loans amounted to $3,567,631 thousand, a decrease from$4,000,000 thousand in the previous year, reflecting a decline of approximately 10.8%[48] - The total amortized cost basis of adversely classified loans was $54.8 million, or 1.42$56.7 million, or 1.59% of total loans, at December 31, 2023[48] - Current period charge-offs for total loans were $50 thousand, down from$248 thousand in the previous year, indicating a reduction of approximately 79.8%[48] - The total past due loans reached $6,732 thousand, with$3,184 thousand past due for 30-59 days and $2,708 thousand past due for 90 days or more[50] - Non-accrual loans totaled$25,946 thousand, with $14,773 thousand classified under commercial construction[52] - The balance of commercial real estate owner-occupied loans was$82,531 thousand, a decrease from $84,677 thousand year-over-year[48] - Residential mortgages totaled$393,142 thousand, down from $421,202 thousand, reflecting a decline of approximately 6.7$430,749 thousand, a decrease from $585,113 thousand, indicating a decline of approximately 26.4$7,906 million as of September 30, 2024, with no subsequent defaults on modified loans[64] - The company modified loans for borrowers experiencing financial difficulty, with various concessions including principal forgiveness and interest rate reductions[59] - The company closely monitors the performance of modified loans to assess the effectiveness of its modification efforts[63] - The ratio of non-accrual loans to total loans was 0.32% at December 31, 2023[53] - The provision for credit losses on loans was $1.332 million for the three months ended September 30, 2024, compared to$1.752 million for the same period in 2023, reflecting a decrease of 24%[65] - The allowance for credit losses (ACL) for loans increased to $63.7 million at September 30, 2024, from$59.0 million at December 31, 2023, representing a growth of 4.7%[66] Deposits and Borrowings - The total deposits amounted to $4.189 billion as of September 30, 2024, up from$3.978 billion at December 31, 2023, indicating an increase of 5.3%[75] - The reserve for unfunded commitments decreased to $4.6 million at September 30, 2024, down from$7.1 million at December 31, 2023, a reduction of 35.2%[69] - The total borrowed funds increased to $59.949 million at September 30, 2024, compared to$25.768 million at December 31, 2023, marking a significant rise of 132.8%[77] - The company had $875.3 million in reciprocal deposits at September 30, 2024, compared to$835.0 million at December 31, 2023, reflecting an increase of 4.9%[76] - The outstanding subordinated debt was $59.7 million at September 30, 2024, slightly up from$59.5 million at December 31, 2023[78] Capital and Equity - The Company had a total capital to risk-weighted assets ratio of 13.07% as of September 30, 2024, exceeding the minimum requirement of 8.00%[96] - The Tier 1 capital to risk-weighted assets ratio was 10.36% as of September 30, 2024, above the minimum requirement of 6.00%[96] - Total shareholders' equity increased by $39.0 million, or 12$19.1 million rise in retained earnings[139] - The balance of shareholders' equity increased to $368,109,000 as of September 30, 2024, compared to$299,699,000 as of September 30, 2023[12] - Total stockholders' equity increased to $368,109 thousand as of September 30, 2024, up from$329,117 thousand at the end of 2023, reflecting a growth of 11.9%[15] Income and Expenses - Net income for Q3 2024 was $10.0 million, or$0.80 per diluted share, up from $9.7 million, or$0.79 per diluted share in Q3 2023, reflecting a $288 thousand increase primarily due to a$1.7 million rise in non-interest income[135] - For the nine months ended September 30, 2024, net income decreased to $28.0 million, or$2.26 per diluted share, from $30.2 million, or$2.46 per diluted share in the same period of 2023, a decline of $2.1 million attributed to a$7.2 million drop in net interest income[136] - Net interest income decreased by $482 thousand, or 1$38.0 million, primarily due to a $7.7 million increase in deposit interest expense[143] - Net interest margin was 3.22$6.1 million, an increase of $1.7 million compared to the prior year period[156] - Non-interest expense for the three months ended September 30, 2024, amounted to$29.4 million, an increase of $1.0 million, or 4$1,332 million, a decrease of $420 thousand compared to the prior year period[153] Assets and Securities - Total assets for the Company as of September 30, 2024, amounted to$511.7 million, with a capital adequacy ratio of 13.12%[98] - Total assets increased to $4.74 billion as of September 30, 2024, a rise of$276.8 million, or 6%, driven by an $291.3 million increase in total loans, primarily in commercial real estate and construction loans[137] - The fair value of debt securities is$622,527,000, a decrease from $661,113,000 as of December 31, 2023, representing a decline of approximately 5.8$11,181,000 as of September 30, 2024, compared to $1,595,000 at December 31, 2023, indicating a significant increase of 600$8,000,000 at September 30, 2024, up from $2,800,000 at December 31, 2023, reflecting a 185.7$9,448,000 as of September 30, 2024, from $7,058,000 at December 31, 2023, reflecting an increase of 33.8$8.9 million for the nine months ended September 30, 2024[202] - The Company granted a total of 122,042 restricted stock awards during the nine months ended September 30, 2024, compared to 73,904 in the same period of 2023[106] - Total stock-based compensation expense for the three months ended September 30, 2024, was $622 thousand, compared to$584 thousand for the same period in 2023[102] - The average grant date fair value of restricted stock awards decreased from $32.04 in 2023 to$24.68 in 2024[106]