Banker & Tradesman photo / File

Successful lending strategies propped up the second-quarter financial performance of two Massachusetts-based banks despite headwinds from high interest rates and intense competition for deposits.

Lowell-based Enterprise Bank recorded a net income of $9.7 million, or $0.79 per diluted common share, in the second quarter which was down from the first quarter’s $10.8 million or $0.88, but up from the $8.2 million or $0.67 in the second quarter of 2022.

This was mostly due to the higher net interest income boosted by loan interest incomes and other interest-earning asset income despite being partially offset by higher deposit costs.

“We are pleased with our second quarter results. Our operating strategy has always been to serve our customers and communities through consistent and disciplined lending, a conservative and long-term focus, being highly responsive to our customers’ banking needs, and making ongoing investments in our products, services, and people to provide the best banking services through all economic cycles,” Enterprise Bank Executive Chairman George Duncan said in a statement. “We have always sought to fund asset growth with relationship-based customer deposits and use wholesale borrowings as supplemental funding for relatively short periods of time. This approach has served us well over time and especially now. We have a relatively high level of liquidity with significant funding capacity and are well positioned to take advantage of market opportunities in the current environment.”

The bank’s total customer deposits amounted to $4.08 billion, which is up by 1 percent or $59.4 million compared to the first quarter and the second quarter of 2022.

Total loans also reached $3.35 billion, which increased by 4 percent and 9 percent from the first quarter and second quarter of 2022, respectively. The growth in loans was due to “good demand” in their existing markets, according to a statement from CEO Jack Clancy.

Enterprise Bank’s cash and cash equivalents amounted to $258.8 million, while wholesale borrowings amounted to $3.3 million by the end of June.

Meanwhile, Everett Co-operative Bank saw second-quarter net income increase to $1.43 million, from $901,000 in the first quarter and $1.40 million in the second quarter of last year. For the six-month period from January to June, the bank’s $2.3 million net income was less than the $2.8 million it recorded at the same time last year.

“As we continue in our second fiscal year of being a publicly traded company and executing on our strategic plan, strong loan growth and prudent credit risk management continue to drive earnings. Competition for deposits in our market and the current economic environment have negatively impacted our margin. Despite these funding cost pressures, growth in our balance sheet has enabled us to maintain earnings while we continue to build out our infrastructure,” Everett Bank President and CEO Richard J. O’Neil Jr. said in a statement released along with the bank’s earnings.

Everett Bank’s net interest income was flat at $6.4 million on a quarterly basis but saw a 19.3 percent jump from the $5.4 million it posted in the second quarter a year ago. The bank also reported a decrease in provision for credit losses due to lower loans sold in the quarter.

The bank reported that loans reached $996.7 million in the second quarter, which was higher than the $885.7 million by the end of 2022. Deposits also grew by 9.6 percent to $787.0 million from the $718.1 million it had by the end of last year.