iStock illustration
Lowell-based Enterprise Bank saw second quarter earnings fall 27 percent year-over-year, due in part to increased costs for employee salaries.
Enterprise Bank had second quarter net income of $8.16 million, or $0.67 per diluted common share, compared to $11.1 million, or $0.92 per diluted common share, in the second quarter of 2021.
The bank in its second quarter earnings statement attributed the lower net income in part to a $1.7 million increase in noninterest expenses, which were up 7 percent compared to the second quarter of 2021. The bank’s noninterest expenses totaled $26.9 million in the second quarter.
Most of that increase came from salaries and employee benefits, which were up $1.3 million, or 8 percent, year over year. The bank said the increase included $596,000 in performance-based accruals.
Also affecting net income in the second quarter was an increase in the provision for credit losses, which the bank attributed to loan growth and economic conditions.
“The relatively high provision for credit losses of $2.4 million for the second quarter of 2022 compared to [$39,000] in the second quarter of 2021 was attributable mainly to loan growth, and to a lesser extent, the worsening of forecasted economic conditions due to the rising interest rate environment and persistent high inflation levels, partially offset by improved credit quality,” Enterprise Bank CEO Jack Clancy said in the earnings statement.
Clancy said loan growth was “especially strong” in the second quarter, increasing by 5 percent from the end of March. The bank saw high customer demand for loans and strong business development efforts, he said.
Enterprise Bank had $3.08 billion in total loans at the end of the second quarter, up six percent from the end of 2021, when loans totaled $2.92 billion. The bank’s total assets were $4.42 billion as of June 30, down from $4.45 billion on Dec. 31.
Deposits totaled $4.02 billion in the second quarter, up 1 percent from Dec. 31, when deposits were $3.98 billion.
Market volatility affected Enterprise Bank’s wealth management business. Wealth assets under management have fallen below $1 billion, decreasing by 18 percent since Dec. 31 to $849.5 million. The bank’s wealth assets under administration fell to $52.2 million, a 20 percent decline since the end of the year. The bank attributed the declines to market performance.
Enterprise opened a new branch in Londonderry, New Hampshire in May.
“The new branch is in a highly visible location and reflects our strategy of contiguous organic expansion into strong commercial markets,” the bank’s executive chairman and founder, George Duncan, said in the statement. “Our operating strategy also includes ongoing investment in our team members, a deep commitment to our communities and continuous strengthening of our digital security and capabilities, with the latter allowing us to enhance existing customer relationships, expand beyond our physical locations and improve operating efficiency.”
