Enterprise Bancorp, Inc. Announces 2007 Second Quarter Financial Results and Quarterly Dividend.

LOWELL, Mass. -- Enterprise Bancorp, Inc. (the "company") (NASDAQ:EBTC) announced net income of $2.318 million for the quarter ended June 30, 2007 compared to $2.182 million during the quarter ended June 30, 2006, an increase of 6%. Diluted earnings per share were $0.29 for the second quarter compared to $0.28 for the same period in 2006, an increase of 4%.

Net income for the six months ended June 30, 2007 amounted to $4.540 million compared to $4.238 million for the same period in 2006, an increase of 7%. Diluted earnings per share were $0.58 for the six months ended June 30, 2007 compared to $0.54 for the same period in 2006, an increase of 7%.

The company also announced a quarterly dividend of $0.08 to be paid on September 4, 2007 to shareholders of record as of August 14, 2007. The quarterly dividend represents a 14% increase over the 2006 dividend rate.

Year-to-date net income growth resulted primarily from an increase in non-interest income and a decrease in the provision for loan losses, partially offset by an increase in non-interest expense and a decrease in net interest income.

Net interest income for the six months ended June 30, 2007 amounted to $20.1 million compared to $20.5 million for the same period in 2006, a decrease of 2%. Net interest margin, the spread earned between interest-earning assets and the company's funding sources, primarily deposits, was 4.55% for the six months ended June 30, 2007, compared to 4.81% for the same period in 2006. Net interest margin for the quarter ended June 30, 2007 was 4.51% compared to 4.59% and 4.83% for the quarters ended March 31, 2007 and June 30, 2006, respectively. The decrease in margin resulted from both the flat yield curve and a highly-competitive marketplace.

Non-interest income was $4.6 million for the six months ended June 30, 2007, an increase of $1.3 million or 40% over the same period in 2006. The growth resulted primarily from an increase of $487 thousand in gains on security sales, which occurred mainly in the second quarter, and from increases of $329 thousand in investment advisory fees, $214 thousand in bank-owned life insurance income and $200 thousand in deposit-service fees.

Non-interest expense amounted to $17.5 million for the six months ended June 30, 2007 compared to $16.5 million for the same period in 2006, an increase of 6%. The increases were predominantly in occupancy and compensation-related costs which support the company's growth.

The provision for loan losses, which is impacted by asset quality and loan growth, amounted to $135 thousand for the six months ended June 30, 2007 compared to $517 thousand for the same period in 2006, a decrease of $382 thousand. The reduced provision reflects continued favorable asset quality. The allowance for loan losses to total loans ratio was 1.65% at June 30, 2007 compared to 1.70% at December 31, 2006.

Key Financial Highlights

* Total assets were $1.044 billion at June 30, 2007 as compared to $979.3 million at December 31, 2006, an increase of 7%.

* Total loans increased 4% since December 31, 2006, amounting to $794.6 million at June 30, 2007.

* Total deposits, excluding brokered deposits, were $818.8 million at June 30, 2007 and $802.6 million at December 31, 2006, an increase of 2%. Brokered deposits amounted to $120.1 million and $64.9 million on those respective dates.

* Investment assets under management increased to $528.3 million at June 30, 2007 compared to $502.1 million at December 31, 2006, an increase of 5%.

* Total assets under management amounted to $1.592 billion at June 30, 2007 as compared to $1.503 billion at December 31, 2006, an increase of 6%.

George L. Duncan, Chairman of Enterprise Bancorp, Inc. summarized the June 30, 2007 results by stating, "The flat rate environment and highly-competitive marketplace continue to negatively impact margins and challenge earnings growth across the banking industry in 2007. In light of this challenging environment, we are very pleased to report year to date 2007 net income growth of 7%. Furthermore, it is gratifying to report that our growth exceeded the $1 billion in assets milestone for the first time. We view this as a significant achievement and one that positions us well for the future."

John P. Clancy, Jr., Chief Executive Officer, added, "We remain focused on investing in our future and maintaining our commitment to a long-term strategy of geographic expansion and commercial banking growth, delivered by a highly-skilled management team and a well-trained, service-orientated employee base."

Enterprise Bancorp, Inc. is a Massachusetts corporation that conducts substantially all of its operations through Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank. The company principally is engaged in the business of attracting deposits from the general public and investing in commercial loans and investment securities. Through the bank and its subsidiaries, the company offers a range of commercial and consumer loan and deposit products as well as investment management, trust and insurance services. The company's headquarters and the bank's main office are located at 222 Merrimack Street in Lowell, Massachusetts. The company's primary market area is the Merrimack Valley, North Central region of Massachusetts and South Central New Hampshire. The company has fourteen full-service branch banking offices located in the Massachusetts cities and towns of Lowell, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Leominster, Tewksbury, and Westford, and in Salem, New Hampshire, which serve those cities and towns as well as the surrounding communities. The Company plans to open a new branch facility in the city of Methuen, Massachusetts in early 2008.

The above text contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," and other expressions that predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the company. These risks, uncertainties and other factors may cause the actual results, performance and achievements of the company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to general economic conditions, changes in interest rates, regulatory considerations and competition. For more information about these factors, please see our most recent Annual Report on Form 10-K on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Any forward-looking statements contained in this press release are made as of the date hereof, and we undertake no duty, and specifically disclaim any duty, to update or revise any such statements, whether as a result of new information, future events or otherwise.

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