 LOWELL, Mass., July 27, 2020 GLOBE NEWSWIRE -- Enterprise Bancorp, Inc. NASDAQ: EBTC, parent of Enterprise Bank, announced net income for the three months ended June 30, 2020 of 7.3 million, or 0.61 per diluted share, compared to 7.8 million, or 0.66 per diluted share, for the three months ended June 30, 2019. Net income for the six months ended June 30, 2020 amounted to 11.3 million, or 0.95 per diluted share, compared to 16.5 million, or 1.39 per diluted share, for the six months ended June 30, 2019. As previously announced on July 21, 2020, the Company declared a quarterly dividend of 0.175 per share to be paid on September 1, 2020 to shareholders of record as of August 11, 2020.Chief Executive Officer Jack Clancy commented, The second quarter was highlighted by several key operating and strategic initiatives. Our branch team continued to effectively service our customers through our drive-ups and in-branch appointments with most of the non-branch team working remotely. Beginning in April, we successfully supported our customers and communities through the Paycheck Protection Program PPP and as of June 30, 2020, we had 2,709 PPP loans approved totaling 508 million with a median loan size of 67 thousand. The PPP results were truly a bank-wide effort and I am so proud that we were able to support our customers during this time of financial uncertainty.Mr. Clancy further commented, Total assets, total loans, and customer deposits as of June 30, 2020 have increased by 27, 32, and 26, respectively, compared to June 30, 2019. Our growth figures have been significantly impacted by both the outstanding PPP loans and the pandemic in general. Excluding PPP loans, total loans have increased by 11 compared to June 30, 2019. Deposit growth has been positively and significantly impacted by the PPP, stimulus checks and the ongoing COVID-19 pandemic as the PPP loan monies were distributed into deposit accounts and many customers are proactively building liquidity in response to the economic uncertainty caused by the pandemic. We anticipate that as the majority of PPP loans are forgiven or paid off, which we believe will occur principally over the next 12 months, and as customers spend down their PPP funds, this will result in a reduction in both loans and deposits.Founder and Chairman of the Board George Duncan commented, This was truly an unprecedented quarter and the Enterprise team executed remarkably. The pandemic has presented many financial and other challenges for our team and for many of our customers, which is one reason why I am so proud of our successful participation in the Paycheck Protection Program. Our effort, teamwork and results were one of the more notable achievements that I have witnessed in my years in banking. The program was highly complex, yet our team rolled it out very quickly. Our lending team and hundreds of Enterprise bankers made an exhausting effort and ultimately we were able to assist in delivering much needed PPP funds to businesses and non-profits in our communities.Chief Financial Officer, Joe Lussier commented, On July 7, 2020, our team completed a private placement with registration rights of 60 million in fixed-to-floating rate subordinated notes due 2030 and redeemable on or after July 15, 2025. We are very pleased with the successful issuance of the subordinated notes at an interest rate of 5.25, which was among the lower end of rates realized by public banks since the pandemic began. We anticipate the additional capital would increase the Banks total capital to risk-weighted assets ratio from 11.79 at June 30, 2020 to 13.58 on a proforma basis. We believe the additional capital positions us well for the economic uncertainty surrounding the pandemic and also positions us to take advantage of market opportunities in the years ahead. We also issued subordinated notes in 2000 and 2015 and after the July issuance the total outstanding amount of subordinated notes is 75 million.Paycheck Protection ProgramThe PPP program was created by the Coronavirus Aid, Relief, and Economic Security Act the CARES Act and instituted by the Small Business Administration SBA. The program allows entities to apply for a 1 interest rate loan with payments deferred until the date the lender receives the applicable forgiveness amount from the SBA. The PPP loans may be partially or fully forgiven by the SBA if the entity meets certain conditions. For most PPP loans, the maturity term is two years from the funding date. For PPP loans that the SBA approved on or after June 5, 2020, the loan must have a maturity of at least five years. All PPP loans are fully guaranteed by the SBA and are included in total loans outstanding. As of June 30, 2020, the Company had funded 2,636 PPP loans totaling 505.6 million.In addition to generating interest income, the SBA pays lenders fees for processing PPP loans. As of June 30, 2020, the Company has recorded 17.0 million in PPP related SBA fees and is accreting these fees into interest income over the life of the applicable loans. If a PPP loan is forgiven or paid off before maturity, the remaining unearned fee is realized into income at that time. During the quarter, the Company recognized 1.6 million in PPP related SBA fees. The remaining 15.4 million in fees are expected to be recognized as the PPP loans are forgiven over the next several quarters.Results of OperationsThroughout this press release we have noted certain ratios or other measures of the Companys performance as having been adjusted to remove the impact of PPP loans. The table on page 9 provides a reconciliation of the non-GAAP measures to the information presented under U.S. generally accepted accounting principles GAAP.The net income results for the quarter ended June 30, 2020 compared to the prior year quarter were impacted by the PPP and the pandemic. The provision for loan losses increased as the Company added to general reserves to address the impact of COVID-19 on the economy and the Companys loan portfolio. Net interest income increased mainly from loan growth and PPP related income, while operating expenses increased from the Companys strategic growth initiatives and higher salary and benefit costs related to the PPP effort and the pandemic.Net interest income for the three months ended June 30, 2020 amounted to 32.5 million, an increase of 3.7 million, or 13, compared to the three months ended June 30, 2019. Net interest income for the six months ended June 30, 2020 amounted to 62.4 million, an increase of 5.6 million, or 10, compared to the six months ended June 30, 2019. The increase in net interest income was due largely to interest-earning asset growth, primarily in loans, partially offset by a decline in tax equivalent net interest margin net interest margin or margin. The Company recognized 948 thousand in PPP interest income and 1.6 million in PPP related SBA fees, accreted to interest income, during the quarter.Average loan balances increased 661.4 million, or 28, for the three months ended June 30, 2020 and 443.1 million, or 19, for the six months ended June 30, 2020, compared to the same respective 2019 period averages. Excluding PPP loans, average loan balances increased 293.5 million, or 12, and 259.1 million, or 11, for the three and six months ended June 30, 2020, compared to the same respective 2019 period averages.Net interest margin was 3.59, 3.89, and 3.96 for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. Net interest margin was 3.73 and 3.97 for the six months ended June 30, 2020 and June 30, 2019, respectively. Excluding PPP loans, net interest margin for the three and six months ended June 30, 2020 was 3.68 and 3.78, respectively. The lower margin results primarily reflect the significant decline in interest rates since the comparable periods resulting in interest-earning asset yields declining faster than the cost of funding. Net interest margin for the June 2020 quarter was also impacted by higher balances in lower-yielding short-term and overnight investments than the comparable periods. Interest-earning asset yields have been impacted by a 225 basis point decrease in the Federal Funds rate since June 30, 2019, with 150 basis points of that total decline occurring in March 2020. Term interest rates have also fallen significantly over the respective periods and collectively these interest rate decreases have reduced yields on loan repricing, short-term and overnight investments and interest-earning asset growth. The Company funds these interest-earning assets principally through non-term customer deposits, which were less impacted by interest rate declines.For the three months ended June 30, 2020, the provision for loan losses amounted to 2.7 million, compared to 955 thousand for the three months ended June 30, 2019. The provision for the quarter ended June 30, 2020 consisted of 1.9 million in general reserve factor increases primarily related to economic weakness caused by the COVID-19 pandemic and its impact on credit quality in the loan portfolio and 800 thousand related to classified and impaired loans.For the six months ended June 30, 2020, the provision for loan losses amounted to 8.8 million, compared to 555 thousand for the six months ended June 30, 2019. The provision for the six months ended June 30, 2020 consisted of 5.2 million in general reserve factor increases primarily related to economic weakness caused by the COVID-19 pandemic and its impact on credit quality in the loan portfolio, 2.3 million related to classified and impaired loans and 1.3 million related to loan growth and other factors.The provisions for the 2019 periods were impacted by generally positive credit metrics, partially offset by the impact of loan growth. 