Enterprise Bancorp Reports $10.4 Million Net Income in Q1 2025, Plans Merger with Independent Bank Corp

Enterprise Bancorp, Inc. reported a net income of $10.4 million for the first quarter of 2025, translating to earnings of $0.84 per diluted share, a 23% increase from the $8.5 million, or $0.69 per diluted share, recorded in the same period last year. This growth was primarily driven by a $3.5 million rise in net interest income, which reached $38.7 million, despite a $1.0 million increase in non-interest expenses. The net interest margin improved to 3.32%, up from 3.20% in the prior year, benefiting from a favorable loan yield and the sale of non-performing loans.

Total assets increased to $4.90 billion as of March 31, 2025, a 2% rise from $4.83 billion at the end of 2024. This growth was largely attributed to a $66.7 million increase in total loans, which reached $4.05 billion, with significant contributions from commercial real estate loans. Total deposits also rose by 3% to $4.30 billion, driven by a $150 million increase in brokered deposits, although customer deposits decreased by $37 million during the same period.

The company’s total shareholders' equity grew by 7% to $385.4 million, up from $360.7 million at the end of 2024. This increase was primarily due to a reduction in accumulated other comprehensive loss, which decreased by $17 million, and an increase in retained earnings of $7.3 million. The allowance for credit losses (ACL) for loans stood at $64.0 million, representing 1.58% of total loans, slightly down from 1.59% at the end of the previous year.

Operationally, the company sold non-performing loans with a net book value of $956 thousand, resulting in net recoveries of $461 thousand. The non-performing loan ratio increased to 0.70% from 0.67% at the end of 2024. The company continues to focus on maintaining a diversified loan portfolio, with commercial loans making up 86% of total loans. The management remains optimistic about future growth, particularly in the commercial real estate sector, while also navigating the challenges posed by the current economic environment and interest rate fluctuations.

Looking ahead, Enterprise Bancorp is in the process of merging with Independent Bank Corp., a move expected to close in the second half of 2025, pending regulatory approvals. This strategic decision aims to enhance the company's market position and operational capabilities, although it may introduce transitional challenges. The management emphasizes a commitment to maintaining strong financial health and operational efficiency during this period of change.