Enterprise Bancorp, Inc. :EBTC-US: Earnings Analysis: Q3, 2016 By the Numbers : October 26, 2016

Enterprise Bancorp, Inc. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Enterprise Bancorp, Inc. – Century Bancorp, Inc. Class A, Independent Bank Corp., Washington Trust Bancorp, Inc., Webster Financial Corporation and Brookline Bancorp, Inc. (CNBKA-US, INDB-US, WASH-US, WBS-US and BRKL-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 25.77 million, Net Earnings of USD 4.71 million.
  • Net interest income margins narrowed from 86.05% to 84.68% compared to the same period last year.
  • Net loan assets changed 9.09% compared to same period last year and 2.88% from previous period, total deposits changed 13.14% compared to same period last year and 1.70% from previous period.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-09-30 2015-12-31 2016-03-31 2016-06-30 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 23.14 24.78 24.29 24.87 25.77
Revenue Growth (%YOY) 6.99 8.09 7.14 8.79 11.32
Earnings (mil) 4.29 4.72 4.31 4.77 4.71
Earnings Growth (%YOY) 12.03 18.03 19.14 35.73 9.83
Net Margin (%) 18.54 19.05 17.76 19.18 18.3
EPS 0.41 0.45 0.41 0.45 0.41
Return on Equity (%) 9.84 10.58 9.42 9.58 8.8
Return on Assets (%) 0.79 0.84 0.75 0.81 0.77

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Market Share Versus Profits

Revenues History
Earnings History

EBTC-US‘s change in revenue this period compared to the same period last year of 11.32% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that EBTC-US is holding onto its market share. Also, for comparison purposes, revenues changed by 3.59% and earnings by -1.19% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

EBTC-US‘s earnings rose year-on-year. But this growth has not come as a result of improvement in net interest income margins or any loan loss improvement activities in its operations. Net interest income margins were 84.68% compared to 85.60% in the immediate last period. Net interest income after provisions margins were 79.30% this period compared to 84.52% in the previous period. In addition, loan loss provisions as a percentage of net interest income were 6.35% this period and 1.26% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (Qtr YOY)
Total Deposits Growth Rate History (Qtr YOY)

The firm’s decline in net interest income margins was influenced by both the relative drops in the levels of net loan assets and the level of total deposits as a percentage of equity. On an absolute basis, net loan assets changed 9.09% compared to the same period last year and 2.88% from the previous period. Total deposits changed 13.14% compared to the same period last year and 1.70% from the previous period.


Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

Access our Ratings and Scores for Enterprise Bancorp, Inc.

Company Profile

Enterprise Bancorp, Inc. operates as a bank holding company, which engages in the provision of gathering deposits. It offers commercial and consumer loan products, deposit products, and cash management services through its subsidiaries. It also includes investment advisory and wealth management, trust and insurance services. The company was founded by George L. Duncan on February 29, 1996 and is headquartered in Lowell, MA.

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