Enterprise Bancorp, Inc
Annual Report 2020

Plain-text annual report

t c e p s e R PIVOT Love SERVICE CommunityCaring Resiliency Teamwork Excellence Equality n o i s u l c n I ESSENTIAL n o i s s a P 2020 Annual Report About the cover: The power of words can spark emotion, inspire change, shape our beliefs, break us down, and build us up. For the cover of this annual report, we have chosen just a few words to represent the spirit and energy and heart that fueled Enterprise Bank and our team members during the extraordinary events of 2020. e s o p r u p In times of crisis, you ‘‘ find out what you’re made of. When the pandemic hit, our team at Enterprise Bank responded with passion and determination to reinvent the way we do business in our branches and bank wide. Through connection, communication, and a passion for our work, we have come together and overcome the obstacles to become stronger for each other, our customers, and our community.” Veronica Caira, Senior Branch Relationship Manager, VP Dear Friends, Founded on a deep sense of purpose as a genuine community bank, it has been both a privilege and a responsibility for Enterprise Bank to step up and serve our communities and customers during the extraordinary pandemic, economic, and social justice challenges and crises of this past year. It is this deep sense of purpose that has inspired and enabled us to adjust how we have delivered banking services to our customers during the pandemic, while prioritizing an intense focus on keeping our team members and customers safe and connected. It is what motivated us to successfully process more than 2,700 Small Business Administration Paycheck Protection Program (PPP) loans, totaling over $510 million in 2020— being a nationwide leader in PPP lending in relationship to our asset size. It is what has inspired us to create the Series for Racial Equity & Inclusion, establishing a safe space for important conversations and meaningful action surrounding systemic racism and injustice in our communities. And it is what has driven us to support, through financial donations and volun- teerism, the many non-profit and charitable organizations serving those most in need and at risk in our communities, as well as the heroic healthcare and essential workers on the front lines of the pandemic. This is all the result of the tremen- dous efforts of our remarkable Enterprise Bank team members and Board of Directors: their tireless dedication, resiliency, genuine humanity, and—above all else—their spirit. Demonstrated and ingrained in our core values, operating from a true purpose- driven spirit is who we are and why we do what we do here at Enterprise Bank. Richard W. Main, President Jack Clancy, Chief Executive Officer George L. Duncan, Chairman 1 ‘‘ In 44 years of banking, I have never experienced anything like what we have done at Enterprise Bank Our Team: Pivoting and Persevering persever during this pandemic, working to give our customers the same great service at our branches, but in a very different way, whether inside, in the drive-thru, or in the parking lot while they sat in their car. Whatever it took for our customers to feel comfortable and safe, our team members were up to the task.” Tom Hosey, Senior Branch Relationship Manager, VP Our Drum Hill and North Billerica branches celebrated their 20th Anniversaries in 2020. 2 Team Members donated food and winter supplies as part of a day of service. ance While our Enterprise Bank team members go above and beyond every day to provide exceptional service, what they have accom- plished during the COVID-19 pandemic is nothing short of extraordinary. With every obstacle this pandemic has thrown at them, they have had the strength and spirit to pivot and persevere with flexibility, resiliency, and passion to care for one another, our customers, and our communities. Over the last several years, our branch team members have focused on becoming increasingly skilled and cross-trained in all of our products, technology, and services to better serve our valued customers. When the COVID-19 pandemic struck, this extensive cross-training enabled team members to pivot quickly in response, breaking into smaller teams and taking on additional duties to protect the health of our Enterprise family, while ensuring that our branches remained open and able to provide excellent service to our customers. Trained and ready for the new responsibilities, our branch teams embraced the challenges of a “new normal,” including social distancing, monitoring the number of customers and team members in our branches at any given time, and delivering services principally through drive-ups, by appoint- ment, in vestibules, at newly built walk-up windows, and through increased use of digital banking. Our facilities team worked tirelessly to develop and implement adap- tations to keep team members and customers safe with personal protective equipment. Every action we took was rooted in the health and well-being of our team members and customers. We made it a priority to support our team members throughout this pandemic with wellness screenings, flexible schedules, expanded sick and quarantine pay, paid family and medical leave for team members to care for themselves or a family member ill with COVID-19, childcare assistance, and the Enterprise Bank team member qualified disaster relief program. We are truly a family—united by our core values of integrity, community, excellence, teamwork, and professionalism. We have never been more grateful for and proud of our Enterprise Bankers than we are today. They truly make the difference in our Enterprise, and in our communities. 3 Enterprise Bank: #1 Top Place to Work e r u t l u c From day one, Enterprise Bank has believed in the value of a culture where we respect and care for each other, take great pride in the work we do, and provide a positive and rewarding workplace where our team members can grow and prosper. We work hard to create that culture every day. Our beliefs and hard work were recognized in November 2020 when Enterprise Bank was once again named the number one place to work among large-sized companies in the employee-based “Top Places to Work” survey from The Boston Globe. Enterprise Bank has been recognized as a top employer for nine consecutive years, and three times as number one. In January of 2021, our Enterprise was named among the top workplaces in the entire country by Energage, the company that conducts the Globe’s Top Places to Work survey. Our Enterprise ranked number two among employers with 500-999 team members in the National Top Workplaces USA 2021 category. Our team is our greatest asset and is what sets us apart from other companies. This recognition is an accumulation of the contributions, thoughtfulness, dedication, spirit, and pursuit of excellence from all of our team members and is nothing short of amazing in this year of pivots and change. Despite the myriad of obstacles and challenges our team members have faced during this pandemic, they have stepped up and embraced every opportunity to overcome their difficulties and persevere, standing strong and standing together. We believe that team members who feel valued and appreciated make our customers feel the same way. This is a tremendous differentiator for us in this competitive environment. There is nothing more important to us than our Enterprise family, who have made Enterprise what it is today. 4 ‘‘ I was not surprised that Enterprise Bank was again named the Top Place to Work in Massachusetts, because I # have never worked for a company that cares about their team members the way Enterprise does. In an extremely challenging year that forced us to reinvent how we serve each other and our customers, leadership was committed to making sure our team members still felt connected and deeply valued, which has just strengthened the close family culture that makes our Bank so special.” Allison Sullivan, Senior Human Resources Business Partner, AVP 5 strength & stability Our Growth: Resiliency Our Enterprise experienced another strong year of growth and progress, including posting our 125th consecutive profitable quarter and increasing the shareholder dividend for the 29th consecutive year. From day one, Enterprise Bank has been committed to strong, consistent, purposeful, relationship-driven organic growth. 125 CONSECUTIVE PROFITABLE QUARTERS AS OF DEC. 31, 2020 We are proud to share with you some of Enterprise Bank’s financial highlights for 2020. It is important to note that our 2020 asset, loan and deposit growth are significantly impacted by outstanding PPP loan balances. As of December 31, 2020, there were $443.1 million of PPP loans outstanding, which were net of $10.0 million in unearned SBA fees, on our balance sheet. Such PPP loans also positively impact deposit and asset balances, although we believe at an amount less than $443.1 million. It is expected that the majority of PPP loan balances will be paid off during 2021 which will contract our asset, loan and deposit figures. Assets, loan and deposit growth rates are shown in the table to the right at both their actual December 31, 2020 amounts and net of the $443.1 million. Some key financial figures are as follows: • Net income was $31.5 million; or $2.64 per diluted share, • Total assets ended 2020 at $4.01 billion ($3.57 billion, net of the $443.1 million), • Total customer deposits amounted to $3.48 billion ($3.03 billion, net of the $443.1 million), • Total loans amounted to $3.07 billion ($2.63 billion, net of the $443.1 million), • Total investment assets under management amounted to $1.00 billion, and • As announced January 19, 2021, a quarterly dividend of $0.185 per share was declared. In July, we added capital by issuing $60 million in subordinated notes to provide the Bank with additional financial strength in uncertain times, to fund growth over the long-term, and to take advantage of market opportunities that may occur in the years ahead. 6 With historically low ‘‘ interest rates, Enterprise Bank experienced a record year for mortgage loans. Through it all, our entire team came together to make the process smooth, effortless, and personal for the customer. I am so proud to work for a community bank that truly puts its customers first.” Cheryl Adams, Mortgage Officer, Bank Officer Team Members showing love for their community #Lawrencestrong Our average annual compounded growth rates for each of the last five, ten, fifteen, and twenty-year time periods are as follows: AVERAGE ANNUAL COMPOUNDED GROWTH RATES ITEM Bank Assets Investment Assets Under Management Loans Outstanding Customer Deposits Net Income LAST 5 YEARS LAST 10 YEARS LAST 15 YEARS LAST 20 YEARS 12% 8% 11% 13% 14% 11% 7% 10% 11% 11% 10% 6% 10% 11% 9% 10% 6% 12% 11% 11% AVERAGE ANNUAL COMPOUNDED GROWTH RATES, EXCLUDING PPP* ITEM Bank Assets Loans Outstanding Customer Deposits LAST 5 YEARS LAST 10 YEARS LAST 15 YEARS LAST 20 YEARS 9% 7% 10% 10% 9% 9% 9% 9% 10% 10% 11% 10% * In calculating these growth rates, 2020 Loan, Asset and Deposit balances have been reduced by PPP loans outstanding, net of unearned SBA fees, of $443.1 million at December 31, 2020. 7 SELECTED FINANCIAL DATA Year Ended December 31 2020 2019 2018 2017 2016 EARNINGS DATA Net interest income Provision for loan losses Net interest income after provision for loan loss Non-interest income Net gains (losses) on sales of available for sale securities Non-interest expense Income before income taxes Provision for income taxes COMMON SHARE DATA Basic earnings per share Diluted earnings per share Book value per share at year end Dividends paid per share Basic weighted average shares outstanding Diluted weighted average shares outstanding $ 130,134 $ 115,857 (dollars in thousands, except per share data) 108,835 $ $ 97,522 12,499 117,635 17,020 227 93,254 41,628 10,172 1,180 114,677 16,173 146 86,415 44,581 10,381 2,250 106,585 14,940 (2,950) 80,878 37,697 8,816 $ $ 2.64 2.64 28.01 0.70 $ $ 2.90 2.89 25.09 0.64 $ $ 2.47 2.46 21.80 0.58 1,430 96,092 14,958 716 76,145 35,621 16,228 19,393 1.68 1.66 19.97 0.54 $ $ $ $ 86,792 2,993 83,799 13,639 802 70,328 27,912 9,161 $ 18,751 $ $ 1.7 1 1.70 18.72 0.52 11,897,813 11,789,570 11,679,520 11,568,430 10,966,333 11,919,508 11,829,818 11,750,462 11,651,763 11,039,511 Net income $ 31,456 $ 34,200 $ 28,881 YEAR END BALANCE SHEET AND OTHER DATA Total assets(1) $ 3,571,254 $ 3,235,049 $ 2,964,358 $ 2,817,564 $ 2,526,269 Loans serviced for others (2) 78,991 Investment assets under management(2) 1,003,841 95,905 916,623 89,232 800,751 89,059 844,977 80,996 725,338 Total assets under management(1) $ 4,654,086 $ 4,247,577 $ 3,854,341 $ 3,751,600 $ 3,332,603 Interest-earning deposits $ 213,146 $ 23,867 $ 19,255 $ 14,496 $ 17,428 Investment securities Total loans(1) Allowance for loan losses Customer deposits(1) Total deposits (including brokered deposits)(1) Borrowed funds Subordinated debt(3) Total stockholders’ equity RATIOS Return on average total assets Return on average stockholders’ equity Allowance for loan losses to total loans(4) Stockholders’ equity to total assets(4) Dividend payout ratio 0.82% 9.95% 1.69% 9.36% 26.52% 583,049 2,630,790 44,565 505,255 2,565,459 33,614 432,921 2,387,506 33,849 405,206 2,269,904 32,915 374,790 2,022,729 31,342 3,033,198 2,786,730 2,507,999 2,293,872 2,209,559 3,108,193 4,774 73,744 334,426 2,786,730 2,564,782 2,441,362 2,268,921 96,173 14,872 296,641 1.10% 12.31% 1.31% 9.17% 22.07% 100,492 14,860 255,297 1.00% 12.15% 1.42% 8.61% 23.48% 89,000 14,847 231,810 0.73% 8.58% 1.45% 8.23% 32.14% 10,671 14,834 214,786 0.78% 9.33% 1.55% 8.50% 30.41% (1) Balance has been adjusted to exclude $443.1 million in PPP loans outstanding, which were net of $10.0 million in unearned SBA fees, at December 31, 2020. The actual balances of total assets, total loans and total deposits were $4.01 billion, $3.07 billion, and $3.55 billion, respectively, at December 31, 2020. (2) Loans serviced for others and investment assets under management are not carried as assets on the Company’s Consolidated Balance Sheet. Please refer to the Company’s Form 10-K for more information. (3) In July 2020, we added capital by issuing $60.0 million in subordinated notes. Please refer to the Company’s Form 10-K for more information. (4) Ratio has been adjusted to exclude PPP loans outstanding net of unearned SBA fees, of $443.1 million at December 31, 2020. The actual allowance for loan losses to total loans and stockholders’ equity to total assets ratios were 1.45% and 8.33%, respectively, at December 31, 2020. 8 ‘‘ As the pandemic created additional hardship and challenges for our community non-profits, we were Our ongoing commitment to community includes Enterprise Bank’s Non-Profit CollaborativeSM, which for thirteen years has provided our region’s non-profit organizations with critically needed support, including a free Educational Seminar Series that we were able to continue in 2020 by shifting to a virtual platform. committed to continuing to offer the expertise and resources of Enterprise Bank’s Non-Profit Collaborative series. support By shifting to a virtual platform, we were able to provide our community non-profit leaders the same level of support in an engaging and interactive forum, while safely socially distancing.” Andrew Duncan, Community and Cultural Liaison 9 ‘‘ Enterprise Bank not only made me aware of the PPP, but also sent the application and guided us in filling out the complicated forms. They made the process simple and seamless during a very difficult time, proving once again what I already knew: comm Enterprise is a bank that cares about the success of its clients.” Scott Hayward, Owner, Tupelo Music Hall & Tupelo Venue Management, Derry, NH ENTERPRISE BANK GENERATED OVER 2,700 PPP LOANS AMOUNTING TO OVER $510 MILLION 10 Paycheck Protection Program (PPP): A Commitment to our Community’s Businesses When our community’s businesses were hard hit by the COVID-19 shutdown, they turned to Enterprise Bank. We served as a conduit for federal financial relief to impacted businesses and non-profit organizations, large and small, In 2020, we were the number one provider of PPP loans among all banks in seventeen of the twenty communities in which we operate, generating over 2,700 PPP loans amounting to over $510 million. Twelve hundred of those loans itment through the provision of the SBA’s Paycheck Protection Program (PPP). The tremendous volume of PPP loans processed by Enterprise Bank over a remarkably short timeframe was accomplished through the teamwork and dedication of Enterprise Bankers from all departments, working tirelessly— sometimes around the clock— to ensure that these PPP funds were distributed to our affected businesses and non-profit organization customers, resulting in thousands of jobs being saved in Massachusetts and New Hampshire. were for $50,000 or less, giving needed relief to the smallest and most adversely impacted of our customers. The PPP effort was truly bank wide. We understood from day one that we are all in this crisis together. With this sense of purpose to our customers, community, and our country, our lending team and hundreds of other Enterprise Bankers worked to deliver these PPP funds and support our customers during this time of financial uncertainty. ‘‘ When this pandemic descended upon our business, it brought confusion and uncertainty. We made one phone call to Enterprise Bank and were guided through the PPP process. The information, assistance, and attention we received completely erased the confusion and uncertainty we were experiencing. We will be forever grateful to Enterprise Bank.” Attorney Socrates De La Cruz, DLC Law Group, Lawrence, MA 11 ‘‘ Team members from areas across the Bank went above and beyond to collaborate and do whatever it took to successfully process thousands of PPP loans for our small and large business customers. Working together, we were united by a common goal: to be there for our customers when they needed us most.” Jennifer Tanguay, Learning & Development Specialist 12 ‘‘ As a commercial bank, we felt a responsibility to step up as a lifeline for our customers desperately in need of PPP loans. We leaned on each other, found ways to streamline the process, and adapted and changed to turn these loans around as quickly as possible before the funds dried up. And because of that, businesses stayed open and their employees got paid. It was a true team effort for our customers.” Dwight Feeney, Senior Commercial Lending Officer, SVP We knew our customers’ survival depended on these PPP loans, so team members from ‘‘ across the Bank, from the executive team to front-line staff, stepped up to work nights, weekends— whatever it took—to make it happen and get these done. Our customers needed us, and we were there for them. That’s the Enterprise Bank way.” Jon Bullock, Commercial Lending Officer II, AVP 13 Growth and Evolution hEnterprise Branches: t w o r g 14 Our North Andover Branch, located at 247 Chickering Road, was decorated for the holiday season prior to its opening on January 4, 2021. We opened our 25th branch location in Lexington in March 2020 and have exceeded our growth expectations despite the pandemic hitting simultaneously to the branch opening. We opened our 26th location in North Andover in January 2021 and have secured a location for our 27th location in Londonderry, NH, expected to open in late 2021 or early 2022. While we adapt and advance to meet the need for the latest in banking technology, we never lose sight that Enterprise Bank is built on personal, meaningful relationships with our customers. We are continually expanding and enhancing our services and capabilities to offer a more rewarding and accessible banking experience beyond the role of typical “bankers.” In addition to handling routine transactions, our Branch Relationship Bankers serve as skilled consultative bankers to efficiently assess our customers’ needs and coordinate with our Wealth Management, Residential Lending, Cash Management, Commercial Lending, Digital Banking, Insurance, and other areas where needed. The physical layout in our redesigned branches supports our Relationship Bankers’ ability to assist customers with their needs in private offices or at convenient pods, which have replaced the traditional teller lines. These modern branches are more efficient for the customer, removing physical barriers and promoting a more engaging and consultative experience. Even as in-person consultations have been limited by the pandemic’s social distancing precautions, we are increasingly serving as trusted advisors, working closely and personally with each customer to solve problems, plan for the future, and grow financially. Enterprise Bankers and community leaders officially opened our Lexington Branch on March 6, 2020. 15 Our Community: Unwavering Commitment In 2020—a year like no other in our history—our commitment to our community was at our forefront. As a bank deeply invested in our community, we stepped up to provide emergency COVID-19 relief donations to many non-profit organizations adversely affected by the pandemic, supporting those at risk as well as the heroic healthcare and essential workers on the front lines. We assisted more than 40 organizations with COVID-19 related relief efforts and supported more than 350 non-profit organi- zations with our annual charitable giving and ongoing community involvement. In 2020 Enterprise Bank was recognized once again for its commitment to our communities at the Boston Business Journal’s Corporate Citizenship Summit virtual event held on September 10, 2020. The Bank was ranked #2 for the highest average hours (53.12 per employee) in community service, tying our rank from last year. The Bank was also recog- nized in the Top 50 listing of the largest corporate donors in Massachusetts with a ranking of #48, up from #55 the previous year. commu Team Members supported hundreds of non-profit organizations in 2020, including Habitat for Humanity. 16 ‘‘ With non-profit organizations facing additional expenses and fundraising challenges Team Members weathered the elements to support the Salvation Army’s Kettle Bell Drive in Derry, NH. nity Our Enterprise Bankers are rooted and invested in the communities we serve, giving back generously to the charitable and non-profit organizations that contribute so much to our region’s quality of life, through volunteerism as well as a commitment to a high level of charitable giving. Enterprise Bank’s stated purpose is ‘to make a positive difference in the lives of the individuals, businesses, and communities we so passionately serve, and to play an active role in making every community in which we operate a better place to live and work.’ It is gratifying to see our team members embrace this purpose year after year. due to the pandemic, Enterprise Bank recognized last year that our support was needed more than ever. We made community donations a priority and stepped up to provide additional emergency COVID-19 relief donations. In good times and in bad, our message to the community is, ‘We’re here for you.’” Roselyn Scales, Community Relations Coordinator 17 Our Capabilities: Digital Evolution Over the past thirty-two years, we have continuously evolved and adapted to meet the needs of our customers, offering a depth and breadth of services not found in most banks our size. Our expertise in commercial lending, residential lending, cash manage- ment, digital banking, investment and wealth management, and ENTERPRISE IS CONTINUOUSLY INVESTING IN TECHNOLOGY TO ENHANCE THE CUSTOMER EXPERIENCE insurance* differentiates us in the market, especially when coupled with our exceptional customer service. Enterprise Bank is continuously investing in technology and process improvements to enhance the customer experience, making interactions faster, easier, and secure. Through our increasing focus on digitalization, we are positioning Enterprise as a bank with progressive digital banking capabilities, providing advanced technology and delivering our leading-edge digital and online banking services through a human customer experience that is highly responsive, warm, trusting, and knowledgeable. Enterprise Bank has embarked on a digital evolution, constantly challenging ourselves to utilize innovation and technology to create an even better online and mobile customer experience. In 2020 we rolled out a new and robust Business Online Banking system, featuring enhanced security, self-administration tools, advanced reporting capabilities, and a more intuitive user experience and responsive design. Enterprise Wealth Management recently launched Wealth Access, a new online and mobile portal that allows its clients to aggregate outside accounts with their Enterprise Wealth account. *Investment and insurance products are not a Deposit, not FDIC Insured, not guaranteed by Enterprise Bank, not insured by any government agency and may lose value. 18 technology transactions using Amazon Alexa compatible devices. We continue to add enhancements to our cash management capabilities and business banking products to offer more flexibility and value for business customers, and for increased security, expanded real time alerts allowing both business and personal customers to monitor accounts and be alerted to changes as they happen. At Enterprise Bank, technology enables us to enhance and strengthen relationships with our valued customers as we create solutions for tomorrow. The new portal provides clients with a single sign-on to access a current and comprehensive view of their total wealth picture. Additionally, they can add invest- ment portfolios, deposit accounts, mortgages, credit cards, real estate, and other assets and loans, from multiple institutions to easily create and customize reports. With the need to process thousands of Paycheck Protection Program (PPP) applications in a remarkably short window of time, we were able to implement electronic signature capability through our business customer portal, allowing businesses to sign loan packages electronically, instead of printing and mailing paper documents. We are working to roll out this electronic signing capability bank wide over the coming year. We launched Voice Banking with Alexa, a new voice channel for our customers to access account and transaction history and conduct 19 inclusion Taking Action: Diversity, Equity and Inclusion Events over the past year, including communities of color being hit the hardest by COVID-19 and job losses, have brought to the forefront the deep-rooted inequities that our diverse communities face. We believe that we all need to be part of the solution. Change starts from every individual, organization, and community listening, under- standing better, and acting. We join the passionate calls for an end to the racism, inequality, injustice, and discrimination that have long afflicted our communities and country. Enterprise Bank was founded in 1988 in downtown Lowell with the purpose of helping to create successful businesses, jobs, opportunities, wealth, and vibrant, prosperous communities. We have intentionally located and expanded our headquarters in the heart of downtown Lowell amongst the diverse population of this city, and we have mindfully expanded to the gateway cities of Lawrence, Nashua, Leominster, and Fitchburg. Our deep immersion in the culture, diversity, ideals, and traditions of these cities makes us better and stronger as an organization. We are proud of the culture of diversity, equality, and inclusion that we have created here at Enterprise Bank. Our company was founded on the core principles of fairness, equality, respect, inclusion, and love. But we understand that our responsibility is turning those principles into action. As our country continues to struggle with the racism, discrimination, inequality, and injustice that have long stained our history, we know we can and must do better. Honoring our International Culture, team members celebrate Diwali Festival of Lights, on November 14, 2020. 20 ‘‘ Some companies take on issues of inclusion and racial equity when it’s trendy or in the public eye, but Part 1 Exploration and Awareness September 29, 2020 Keynote Speaker, Deo Mwano Part 2 How to Cultivate an Inclusion Mindset November 17, 2020 Keynote Speaker, Kisha Dixon Enterprise Bank leadership is continuous in our organization’s commitment as part of our shared values. Enterprise has taken on these uncomfortable conversations from a place of humility, empathy, and compassion, eager to learn and grow and affect positive change in the Bank and in the community.” Kira Morehouse, Senior Digital Marketing Specialist, AVP 21 equality OUR ACTIONS TO DATE Training and Education In 2018 we conducted focus groups with our team members to gather perspectives and perform a gap analysis to determine our training and education needs. From that we conducted microinequities and unconscious bias training for managers and unconscious bias training for team members. Our Multicultural Alliance employee resource group has also hosted bi-monthly educational work- shops to share information with team members on ethnic heritage, further enhancing our understanding of each other. We will significantly increase this training and education. 22 Diversity and Inclusion In March 2018 we created the role of Diversity and Inclusion Specialist to further strengthen our progress in hiring, advancing, and promoting people of color. A key program we initiated was the Bank Career Exploration Program, with the mission to outreach to organizations that primarily serve students of color to provide information on careers in banking, conduct workshops on financial habits, basics of banking, applying, and interviewing for banking positions, shadowing bankers during the workday, and providing internships to students. We will be continually reviewing our Talent Management Plan, to further enhance our hiring, mentoring, advancing, and promoting people of color. Inclusion Council In February of 2020, we announced the creation of Enterprise Bank’s Inclusion Council to celebrate and promote awareness of personal identity in the workplace, identify equity gaps to help resolve them, and strengthen everyone’s sense of belonging within our Enterprise Bank family. The Inclusion Council is committed to helping influence and impact positive change towards social justice and inclusivity within the communities we serve. WE ARE COMMITTED TO HELPING TO CREATE POSITIVE CHANGE IN OUR COMMUNITIES. The Series on Racial Equity and Inclusion Enterprise Bank and our Inclusion Council have taken a leadership role in presenting “The Series on Racial Equity and Inclusion,” a community series with the goal to create a safe space to promote constructive engagement and broaden our perspectives, in partnership with the Greater Lowell Community Foundation, Lowell Development & Financial Corporation, Greater Lowell Chamber of Commerce, The Lowell Plan, Lawrence Partnership, Essex County Community Foundation, Non-Profit Alliance of Greater Lowell, and The Theodore Edson Parker Foundation. Our first seminar, “Exploration and Awareness,” was held in September and featured keynote speaker Deo Mwano, a community advocate skilled in creating space for difficult conversations about racial bias and its systemic impact. Our second seminar, “How to Cultivate an Inclusion Mindset,” was held in November and featured keynote speaker Kisha Dixon, a training leader and culture change agent who specializes in guiding large groups through difficult conversations about the impact of race, culture, and diversity centered around the ideals of equity and inclusion. Takeaways from both seminars can be found on our website. This series will continue in the months and years ahead. Branches and Charitable Contributions Our immersion, involvement, and philanthropy in communities grows from where we locate our branches. We have intentionally sought to open branches in gateway and diverse communities and most of our charitable contributions are allocated to organizations in these communities. We recently increased our charitable con- tribution budget to provide for additional financial contributions to organizations that specifically promote racial justice and equality. Juneteenth We credited vacation time to all team members to commemorate last year’s Juneteenth holiday. Affordable Housing We have very actively supported the funding of affordable housing and our team members have played dynamic and significant roles in fostering increased afford- able housing in our communities. We are committed to helping to create positive change in our communities. Our hope is that each one of us and all of us—as individuals, families, businesses, communities, and a nation—can join together to overcome a history of injustice and work toward a more inclusive and equitable future for all. Inclusion and ‘‘ belonging are priorities at Enterprise Bank, and the Inclusion Council is a visible and intentional commitment by the Bank to recognize and address the challenges facing people of all protected classes. We want everyone to feel included and valued.” Sophy Theam, Diversity & Inclusion and Leadership Program Specialist, VP 23 Looking ahead: Confidence and Optimism All of us at Enterprise Bank have an overwhelming sense of pride and accomplishment in what we have achieved during a year of unprecedented challenges. Although this is a cautious time for banks, as we brace for the long-term impact of the pandemic, we look to the future with confidence and optimism. While the near-term economic outlook remains uncertain, we remain committed to our long-term focus of serving our customers, building relationships, investing in our future, cultivating our digital evolution, expanding geographically, further developing our services and products, and remaining independent. m s i m i t p o ‘‘ Although the pandemic has changed the way we interact at our branches— adhering to the highest standards of social distancing and personal protective equipment for our team members and customers—we haven’t allowed it to affect our ability to meaningfully connect with our customers and deliver exceptional personal service. We may be wearing masks, but they see us smile with our eyes.” Nachele Logan-Clifford, Branch Service Manager, AVP 24 ‘‘ It has been so important to me to know that during this pandemic, Enterprise Bank has always put our safety first. They care not just about me, but about my family. With everything they do—having us work remotely, providing PPE and safeguards—they show us how much they really care about us as team members and as people.” Francis Gonzalez, Senior Loan Servicing Set Up & Reporting Supervisor, AVP Our gratitude: United by a Deep Sense of Purpose Enterprise is the bank it is today – and will be tomorrow – because of the collective contributions from every member of our Enterprise Bank family: our team members, customers, community members, Board of Directors, Advisory Councils, and shareholders. We extend our deepest appreciation to each of you for the trust and confidence you have placed in us and in this Enterprise that we have created. United by our deep sense of purpose, we look forward to 2021 as an opportunity to make a profound difference and create better lives for the families, businesses, and communities we are honored to serve. gratitude George L. Duncan Chairman Jack Clancy Chief Executive Officer Richard W. Main President 25 General Counsel Gallagher & Cavanaugh, LLP SEC & Regulatory Counsel Hunton Andrews Kurth LLP Financial Consultant Raymond L. Anstiss, Jr., CPA Advisor to the Enterprise Wealth Management Committee Marcia S. Wagner, Esquire Honorary Board Members Kathleen M. Bradley Nancy L. Donahue Lucy A. Flynn Eric W. Hanson John P. Harrington Arnold S. Lerner Enterprise Bancorp, Inc. and Enterprise Bank Board of Directors George L. Duncan Founder and Chairman of the Board James F. Conway III Vice Chairman and Lead Director of the Board Former President, Chief Executive Officer and Chairman, Courier Corporation John A. Koutsos Secretary of the Board President, Alec’s Shoe Store, Inc. Luis M. Pedroso Assistant Secretary of the Board Co-Founder, President, and Chief Executive Officer, Accutronics, Inc. Kenneth S. Ansin President, Ansin Consulting Group Gino J. Baroni Owner and Managing Principal, Trident Project Advisors and Development Group John P. Clancy, Jr. Chief Executive Officer, Enterprise Bank John R. Clementi Chief Executive Officer Longview Development, LLC Former President, Plastican, Inc. Dr. Carole A. Cowan Former President Middlesex Community College Normand E. Deschene Former Chief Executive Officer, Wellforce John T. Grady, Jr. Managing Partner, JTG Partners, LLC Mary Jane King President, Conway Management Company Joseph C. Lerner Managing Partner, 819 Energy, LLC Shelagh E. Mahoney Owner and Chief Executive Officer Eastern Salt Company, Inc. Richard W. Main President, Enterprise Bank Dr. Jacqueline F. Moloney Chancellor University of Massachusetts Lowell Michael T. Putziger Chairman, WinnCompanies Carol L. Reid Former Corporate Controller and Chief Accounting Officer Avid Technology, Inc. Nickolas Stavropoulos Former President and Chief Operating Officer, Pacific Gas and Electric Company Anita R. Worden Former Co-Founder, Chief Executive Officer and Director, Yaskawa Solectria Solar 26 222 Merrimack Street, Lowell, MA 01852 • 978-459-9000 26 Convenient Locations in: MASSACHUSETTS: Acton Andover Billerica Chelmsford Dracut Fitchburg Lawrence Leominster Lexington Lowell Methuen North Andover Tewksbury Tyngsborough Westford NEW HAMPSHIRE: Derry Hudson Nashua Pelham Salem Windham MANCHESTER MANCHESTER AUBURN AUBURN CHESTER CHESTER SANDOWN SANDOWN Communities with branch locations are shown in gold. Our 27th branch will be in Londonderry, NH. MERRIMACK MERRIMACK LONDONDERRY LONDONDERRY DERRY DERRY HAMPSTEAD HAMPSTEAD LITCHFIELD LITCHFIELD ATKINSON ATKINSON PLAISTOW PLAISTOW HOLLIS HOLLIS WINDHAM WINDHAM SALEM SALEM HUDSON HUDSON HAVERHILL HAVERHILL GROVELAND GROVELAND ASHBY ASHBY TOWNSEND TOWNSEND PEPPERELL PEPPERELL NASHUA NASHUA DUNSTABLE DUNSTABLE R R O O B B S S G G N N Y Y T T PELHAM PELHAM METHUEN METHUEN GEORGETOWN GEORGETOWN LAWRENCE LAWRENCE H H G G U U O O DRACUT DRACUT BOXFORD BOXFORD NORTH NORTH ANDOVER ANDOVER LOWELL LOWELL ANDOVER ANDOVER FITCHBURG FITCHBURG LUNENBURG LUNENBURG GROTON GROTON WESTFORD WESTFORD CHELMSFORD CHELMSFORD TEWKSBURY TEWKSBURY SHIRLEY SHIRLEY AYER AYER BILLERICA BILLERICA N N O O T T G G W I L M I N W I L M I N MIDDLETON MIDDLETON NORTH NORTH READING READING HARVARD HARVARD LITTLETON LITTLETON CARLISLE CARLISLE LANCASTER LANCASTER BOXBOROUGH BOXBOROUGH ACTON ACTON BEDFORD BEDFORD N N O O T T G G L I N L I N R R U U B B CONCORD CONCORD LEOMINSTER LEOMINSTER STERLING STERLING BOLTON BOLTON STOW STOW MAYNARD MAYNARD LINCOLN LINCOLN LEXINGTON LEXINGTON Investor Relations Enterprise Bancorp, Inc. 222 Merrimack Street, Lowell, MA 01852 978-459-9000 • shareholders@ebtc.com Transfer Agent and Registrar Shareholders who have questions regarding their ownership of Enterprise Bancorp, Inc. stock should contact our transfer agent: Computershare Investor Services PO Box 505000, Louisville, KY 40233 888-218-4390 info@ebtc.com • EnterpriseBanking.com The common stock of Enterprise Bancorp, Inc. is traded on the NASDAQ Stock Market under the symbol “EBTC.” y t i n u m m o c EnterpriseBanking.com 002CSNB837 ‘‘ When I couldn’t hold my annual in-person fundraisers last year due to the pandemic, my fellow team members at Enterprise Bank stepped up and said, ‘Just tell us what you need.’ Thanks to their amazing support, I met or exceeded my fundraising goals. No matter what the challenge, when it comes to giving back to the community, we make it happen at Enterprise Bank.” Angela Veloso, Human Resources IS Analyst, AVP 

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