Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q1 2024 Earnings Presentation
29 slides from Enterprise Financial Services's earnings presentation, Apr 23, 2024
Slide 1: Enterprise Financial Services Corp 2024 First Quarter Earnings Webcast
Exhibit 99.2 Enterprise Financial Services Corp 2024 First Quarter Earnings Webcast
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information in this report may contain “forward-looking statements” within the meaning of and intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include projections b
Slide 3: Financial Highlights - 1Q24
Financial Highlights - 1Q24* • Net Income $40.4 million, down $4.1 million; EPS $1.05 • Net Interest Income $137.7 million, down $3.0 million; NIM 4.13% Earnings • PPNR** $57.4 million, down $18.4 million • Adjusted ROAA** 1.14%, compared to 1.28%; PPNR ROAA** 1.58%, compared to 2.10% • Adjusted ROA
Slide 4: Financial Highlights, continued - 1Q24
Financial Highlights, continued - 1Q24* • Loans $11.0 billion, up $144.4 million Loans & • Loan/Deposit Ratio 90% Deposits • Deposits $12.3 billion, up $77.3 million • Noninterest-bearing Deposits/Total Deposits 31% • Nonperforming Loans/Loans 0.32% Asset • Nonperforming Assets/Assets 0.30% Quality
Slide 5: Areas of Focus
Areas of Focus Organic Loan and Deposit Growth • Continue Funding Loan Growth with Customer Deposits • Build Franchise Value by Expanding Existing and Acquiring New Relationships Disciplined Loan and Deposit Pricing Focused Credit Underwriting and Monitoring Focus on Long-term Earnings Trajectory Co
Slide 6: Loan Trends
Loan Trends In Millions wth 10% Total Loan Gro $10,884 $11,028 $10,513 $10,617 $10,012 1Q23 2Q23 3Q23 4Q23 1Q24 6
Slide 7: Loan Details
Loan Details In Millions Qtr LTM 1Q24 4Q23 1Q23 Change Change C&I $ 2,264 $ 2,186 $ 2,006 $ 78 $ 258 CRE Investor Owned 2,281 2,292 2,240 (11) 41 CRE Owner Occupied 1,280 1,262 1,174 18 106 SBA loans* 1,275 1,282 1,316 (7) (41) Sponsor Finance* 865 872 678 (7) 187 Life Insurance Premium Financing* 1
Slide 8: Loans By Region
Loans By Region In Millions Specialty Lending Midwest $3,898 $3,918 $3,503 $3,338 $3,412 $3,267 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Southwest West $1,813 $1,833 $1,566 $1,605 $1,663 $1,327 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Note: Excludes “Other” loans; Region Components: Midwest (St. Louis & Kansas City), Sou
Slide 9: Deposit Details
Deposit Details In Millions Qtr LTM 1Q24 4Q23 1Q23 Change Change Noninterest-bearing demand accounts $ 3,805 $ 3,959 $ 4,192 $ (154) $ (387) Interest-bearing demand accounts 2,956 2,950 2,396 6 560 Money market accounts 3,431 3,399 2,960 32 471 Savings accounts 576 595 713 (19) (137) Certificates of
Slide 10: Deposits By Region
Deposits By Region In Millions Specialty Deposits** Midwest(*)** $6,219 $6,206 $5,472 $2,778 $2,901 $2,431 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Southwest West* $1,835 $1,828 $1,886 $1,417 $1,351 $1,261 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ,
Slide 11: Specialty Deposits
Specialty Deposits 26.2% • $2.90 billion - Specialty deposits, representing 24% of total deposits • $2.96 billion - Average specialty deposits for 1Q24 • $20.3 million - Related deposit costs in noninterest expense, resulting in an average specialty deposit cost of 2.73% • $126.7 million - Average D
Slide 12: Core Funding Mix
Core Funding Mix Commercial Business Banking Consumer Specialty In Millions $4,315 $1,358 $2,769 $2,901 7% 3% 1% 32% 19% 22% 1Q24 31% 41% 32% 36% 56% 18% 34% 32% 20% 7% Net New/Closed Deposit Accounts Overview BUSINESS COMMERCIAL CONSUMER SPECIALTY BANKING • Estimated uninsured deposits of $3.5 bill
Slide 13: Earnings Per Share Trend - 1Q24
Earnings Per Share Trend - 1Q24 Change in EPS $0.26 $(0.02) $(0.01) $(0.34) $1.16 $1.05 4Q23 Operating Provision for Credit Noninterest Change in Effective 1Q24 Revenue Losses Expense Tax Rate 13
Slide 14: Net Interest Income Trend
Net Interest Income Trend Stable Net Interest Income In Millions $139.5 $140.7 $141.6 $140.7 $137.7 5.26% 5.33% 5.33% 4.99% 4.71% 4.52% 4.49% 4.33% 4.23% 4.13% 1Q23 2Q23 3Q23 4Q23 1Q24 Net Interest Income Net Interest Margin Avg Fed Funds Rate 14
Slide 15: Net Interest Margin
Net Interest Margin Margin Bridge 0.05% (0.04)% (0.07)% (0.04)% 4.23% 4.13% 4Q23 Loans Other Earning Asset Mix Funding Mix Cost of Funds 1Q24 Components of Interest-earning Assets Components of Interest-bearing Liabilities 6.80% 6.87% 6.87% 6.64% 3.09% 3.22% 6.33% 2.84% 2.40% 3.03% 3.14% 6.12% 6.20%
Slide 16: Credit Trends
Credit Trends Annualized Net Charge-offs (Recoveries) to Average Loans Loan Growth and Average Line of Credit Utilization 42.4% 44.6% 41.0% 42.0% 44.4% 106 bps In Millions $501 $275 $267 12 bps $144 (1)bps 26 bps $104 22 bps 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 Organic Loans Avg Line Dr
Slide 17: Allowance for Credit Losses for Loans
Allowance for Credit Losses for Loans Key Assumptions: 1Q24 ACL as a % of • Reasonable and supportable forecast Loans ACL In Millions Loans period is one year with a one year reversion period. Commercial and industrial $ 4,766 $ 59 1.24 % • Forecast considers a weighted average Commercial real estat
Slide 18: Noninterest Income Trend
Noninterest Income Trend In Millions Noninterest Income Other Noninterest Income Detail $6.3 10.8% 15.3% $6.1 9.2% 7.9% 8.1% $0.5 $0.7 $25.5 $5.4 $5.1 $5.0 $2.5 $1.0 $0.4 $1.7 $1.5 $2.7 $0.2 $1.4 $16.9 $4.3 $0.2 $1.3 $2.5 $14.3 $12.1 $12.2 $0.6 $2.1 $0.3 $0.2 $0.1 $2.3 $2.5 $2.6 $2.6 $0.3 $0.6 $0.8
Slide 19: Noninterest Expense Trend
Noninterest Expense Trend In Millions Noninterest Expense Other Noninterest Expense Detail 56.2% 60.2% 50.5% 54.0% 53.1% $24.6 $93.5 $23.4 $1.1 $23.0 $92.6 $22.7 $88.6 $21.7 $1.1 $1.0 $86.0 $1.1 $2.7 $81.0 $1.2 $1.9 $2.1 $2.1 $1.9 $2.7 $2.6 $2.9 $3.0 $39.7 $45.3 $1.1 $2.6 $1.6 $40.7 $41.6 $1.4 $1.4
Slide 20: Capital
Capital Tangible Common Equity/Tangible Assets TBV and Dividends per Share $0.25 $0.25 $0.25 $0.25 $0.25 8.96% 9.01% 8.81% 8.65% 8.51% $33.85 $34.21 $30.55 $31.23 $31.06 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 Tangible Common Equity/Tangible Assets* TBV/Share* Dividends per Share Regulator
Slide 21: Appendix
Appendix
Slide 22: Investment Portfolio
Investment Portfolio Investment Portfolio Breakout AFS & HTM Securities In Millions Obligations of U.S. $1,800 $160 Government- sponsored enterprises Obligations of $1,200 $— 12% states and political TOTAL subdivisions $2.4 billion 42% U.S. Treasury $600 $(160) bills 8% $— $(320) Corporate debt Agen
Slide 23: Liquidity
Liquidity Strong Liquidity Profile EFSC Borrowing Capacity In Billions 42% • $1.3 billion available FHLB capacity 36% 37% • $2.6 billion available FRB capacity $5.2 $4.3 $4.4 • $120.0 million in six federal funds lines $1.1 $0.8 $0.8 $0.1 • $1.1 billion unpledged investment securities $0.1 $0.1 • $3
Slide 24: Office CRE (Non-owner Occupied)
Office CRE (Non-owner Occupied) Total $492.2 Million Office CRE Loans by Location Office CRE Loans by Industry Type Southwest 27.8% Real Estate/ Rental/Leasing Midwest 86.2% 48.9% West 18.2% Specialty Health Care 5.1% and Social Other Assistance 10.1% 3.7% • Average loan-to-origination value 49% Off
Slide 25: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ($ in thousands) 2024 2023 2023 2023 2023 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,731,725 $ 1,716,068 $ 1,611,880 $ 1,618,233 $ 1,59
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ($ in thousands) 2024 2023 2023 2023 2023 RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) Average shareholder’s equity $ 1,738,698 $ 1,652,882 $ 1,648,605 $ 1,621,337 $ 1,568,451 Less average prefer
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended March 31, December 31, September March 31, ($ in thousands) 2024 2023 30, 2023 June 30, 2023 2023 ALLOWANCE COVERAGE RATIO ADJUSTED FOR GUARANTEED LOANS Loans (GAAP) $11,028,492 $10,884,118 $10,616,820 $10,512,623 $10,011,918 Less PPP and o
Slide 29: Enterprise Financial Services Corp
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Enterprise Financial Services — Q1 2024 Earnings Presentation on 6ix