Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q1 2023 Earnings Presentation
31 slides from Enterprise Financial Services's earnings presentation, Apr 25, 2023
Slide 1: Enterprise Financial Services Corp 2023 First Quarter Earnings Webcast
Enterprise Financial Services Corp 2023 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 - 1Q23
Financial Highlights - 1Q23* • Net Income $55.7 million, down $4.3 million; EPS $1.46 • Net Interest Income $139.5 million, up $0.7 million; NIM 4.71% • PPNR** $75.0 million, down $3.6 million Earnings • ROAA 1.72%, compared to 1.83%; PPNR ROAA** 2.32%, compared to 2.40% • ROATCE** 19.93%, compared
Slide 4: Financial Highlights, continued - 1Q23
Financial Highlights, continued - 1Q23* • Loans $10.0 billion, up $274.8 million • Loan/Deposit Ratio 90% Loans & • Deposits $11.2 billion, up $325.5 million, or $75 million excluding brokered CDs Deposits • Estimated uninsured deposits of $3.4 billion**, or 31% of total deposits • Noninterest-beari
Slide 5: Areas of Focus
Areas of Focus Organic Loan and Deposit Growth Disciplined Loan and Deposit Pricing Maintain Strong Asset Quality Maintain a Strong Balance Sheet Opportunistic Talent Additions 5
Slide 6: Total Loan Trends
Total Loan Trends rowth In Millions 11% Total Loan G $10,012 $9,737 $9,269 $9,355 PPP $9,056 PPP PPP $49 $13 $134 1Q22 2Q22 3Q22 4Q22 1Q23 6
Slide 7: Loan Details - LTM
Loan Details - LTM In Millions LTM 1Q23 1Q22 Change C&I $ 2,006 $ 1,438 $ 568 CRE Investor Owned 2,240 1,983 257 CRE Owner Occupied 1,174 1,138 36 SBA loans* 1,316 1,250 66 Sponsor Finance* 678 641 37 Life Insurance Premium Financing* 860 696 164 Tax Credits* 547 518 29 Residential Real Estate 349 4
Slide 8: Loan Details - QTR
Loan Details - QTR In Millions QTR 1Q23 4Q22 Change C&I $ 2,006 $ 1,905 $ 101 CRE Investor Owned 2,240 2,176 64 CRE Owner Occupied 1,174 1,174 — SBA loans* 1,316 1,312 4 Sponsor Finance* 678 635 43 Life Insurance Premium Financing* 860 817 43 Tax Credits* 547 560 (13) Residential Real Estate 349 380
Slide 9: Total Loans By Region
Total Loans By Region In Millions Specialty Lending Midwest $3,382 $3,503 $3,214 $3,267 $3,041 $2,930 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 Southwest West $1,588 $1,656 $1,663 $1,242 $1,327 $1,126 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 Note: Excludes PPP and Other loans; Region Components: Midwest (St. Louis & Kansa
Slide 10: Deposit Details - LTM
Deposit Details - LTM In Millions LTM 1Q23 1Q22 Change Noninterest-bearing demand accounts $ 4,192 $ 4,881 $ (689) Interest-bearing demand accounts 2,396 2,547 (151) Money market accounts 2,960 2,795 165 Savings accounts 713 884 (171) Certificates of deposit: Brokered 370 129 241 Other 524 468 56 To
Slide 11: Deposit Details - QTR
Deposit Details - QTR In Millions QTR 1Q23 4Q22 Change Noninterest-bearing demand accounts $ 4,192 $ 4,643 $ (451) Interest-bearing demand accounts 2,396 2,256 140 Money market accounts 2,960 2,655 305 Savings accounts 713 744 (31) Certificates of deposit: Brokered 370 119 251 Other 524 412 112 Tota
Slide 12: Total Deposits By Region
Total Deposits By Region In Millions Specialty Deposits Midwest* $5,583 $4,940 $5,072 $2,831 $2,495 $2,524 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 Southwest West $1,952 $1,845 $1,835 $1,674 $1,520 $1,417 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, N
Slide 13: Specialty Deposits
Specialty Deposits Specialty deposits of $2.8 billion represent 25% of total deposits. Includes high composition of noninterest-bearing 2.7% deposits with a low cost of funds. 19.2% 14.8% In Millions $1,000 1Q22 $500 2Q22 3Q22 4Q22 23.8% 1Q23 $— Community Property Third- Trust Other 39.5% Assoc Mgmt
Slide 14: Core Funding Mix
Core Funding Mix Commercial Business Banking Consumer Specialty $3,528 $1,343 $2,849 $2,831 In Millions 12% 8% 2% 1% 26% 14% 1Q23 48% 16% 49% 33% 38% 22% 58% 25% 22% 2% 21% Net New/Closed Deposit Accounts Overview Business Commercial Consumer Specialty Banking • Estimated uninsured deposits of $3.4
Slide 15: Earnings Per Share Trend - 1Q23
Earnings Per Share Trend - 1Q23 Change in EPS $0.01 $(0.05) $(0.08) $1.58 $1.46 4Q22 Operating Provision for Credit Losses Noninterest 1Q23 Revenue Expense 15
Slide 16: Net Interest Income Trend
Net Interest Income Trend I Grow th 38% NI In Millions $138.8 $139.5 $124.3 PPP Income $0.5 $109.6 PPP Income $101.2 PPP $1.6 Income $2.9 4.66% 4.71% 4.10% 4.52% 3.55% 3.65% 3.28% 2.20% 0.76% 0.12% 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income PPP Income Net Interest Margin Avg Fed Funds Rate 16
Slide 17: Net Interest Margin
Net Interest Margin Margin Bridge 0.44% 0.03% (0.03)% (0.39)% 4.66% 4.71% 4Q22 Loans Securities Other Earning Asset Cost of Funds 1Q23 Mix Components of Interest-earning Assets Components of Interest-bearing Liabilities 6.33% 1.72% 5.87% 5.10% 1.56% 4.51% 5.69% 1.07% 4.34% 5.25% 0.94% 4.47% 0.67% 0.
Slide 18: Credit Trends
Credit Trends Annualized Net Charge-offs (Recoveries) to Average Loans Loan Growth and Average Line of Credit Utilization 39.9% 43.9% 42.5% 41.0% 42.4% In Millions $388 9 bps $298 $277 7 bps $176 $122 2 bps (1) bps (1) bps $(36) $(6) $(2) $(138) $(85) 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q2
Slide 19: Allowance for Credit Losses for Loans
Allowance for Credit Losses for Loans Key Assumptions: 1Q23 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 $ 4,032 $ 59 1.46 % • Forecast considers a weighted average Commercial real estat
Slide 20: Noninterest Income Trend
Noninterest Income Trend In Millions Fee Income Other Fee Income Detail 15.6% $6.2 $6.1 11.5% 10.8% 10.8% 7.1% $0.3 $0.2 $0.5 $5.3 $18.6 $0.4 $16.9 $16.9 $1.7 $2.6 $2.2 $2.4 $1.8 $14.2 $9.5 $1.2 $6.2 $0.6 $2.2 $3.0 $5.3 $6.1 $2.8 $3.0 $0.3 $3.5 $2.7 $1.2 $0.2 $3.0 $0.2 $2.3 $2.3 $0.8 $2.2 $0.8 $4.8
Slide 21: Operating Expenses Trend
Operating Expenses Trend In Millions Operating Expenses Other Operating Expenses Detail 50.6% 51.0% 50.5% $34.7 $34.4 49.8% 48.1% $1.3 $1.2 $0.9 $1.6 $1.9 $81.0 $77.1 $2.8 $2.6 $27.3 $1.6 $68.8 $25.1 $1.3 $3.6 $65.4 $1.8 $3.7 $62.8 $1.3 $22.4 $2.0 $42.5 $2.5 $38.2 $1.4 $1.6 $1.7 $1.6 $37.0 $1.9 $1.5
Slide 22: Capital
Capital Tangible Common Equity/Tangible Assets* TBV and Dividends per Share $0.21 $0.22 $0.23 $0.24 $0.25 8.81% $28.67 $30.55 8.43% $27.06 $26.63 $26.62 7.80% 7.86% 7.62% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Tangible Common Equity/Tangible Assets TBV/Share Dividends per Share Regulatory
Slide 23: Investment Portfolio
Investment Portfolio Investment Portfolio Breakout AFS & HTM Securities In Millions $1,800 $— Obligations of U.S. Government- sponsored enterprises Obligations of $1,200 $(80) 12% states and political TOTAL subdivisions 43% U.S. Treasury $2.3 Billion $600 $(160) bills 9% $— $(240) Corporate debt Age
Slide 24: Liquidity
Liquidity Strong Liquidity Profile EFSC Borrowing Capacity In Billions 37% • $824 million available FHLB capacity 34% 34% • $2.7 billion available FRB capacity $4.1 $3.7 $3.7 • $140 million in seven federal funds lines $0.5 $0.1 • $449 million unpledged investment securities $1.4 $1.4 • $285 million
Slide 25: Appendix
First Quarter 2023 Earnings Webcast Appendix
Slide 26: Office CRE (Investor-Owned)
Office CRE (Investor-0wned) Total $483.6 Million Office CRE Loans by Location Office CRE Loans by Industry Type Real Estate/ Rental/Leasing Southwest Midwest 85.2% 25.2% 56.7% Information West 1.8% 12.4% Other 4.8% Health Care and Social Assistance Specialty 3.5% Finance and 5.7% Retail Trade Profes
Slide 27: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ($ in thousands) 2023 2022 2022 2022 2022 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,592,820 $ 1,522,263 $ 1,446,218 $ 1,447,412 $ 1,47
Slide 29: 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) 2023 2022 2022 2022 2022 RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) Average shareholder’s equity $ 1,568,451 $ 1,490,592 $ 1,494,504 $ 1,474,267 $ 1,536,221 Less average prefer
Slide 30: 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) 2023 2022 2022 2022 2022 CORE EFFICIENCY RATIO Net interest income (GAAP) $ 139,529 $ 138,835 $ 124,290 $ 109,613 $ 101,165 Tax-equivalent adjustment 2,041 1,983 1,854 1,699 1,506 Net
Slide 31: First Quarter 2023 Earnings Webcast Q&A
First Quarter 2023 Earnings Webcast Q&A
Enterprise Financial Services — Q1 2023 Earnings Presentation on 6ix