Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q4 2024 Earnings Presentation
48 slides from Enterprise Financial Services's earnings presentation, Jan 28, 2025
Slide 1: Fourth Quarter 2024 Investor Presentation
Fourth Quarter 2024 Investor Presentation Exhibit 99.1 Enterprise Financial Services Corp
Slide 2: Forward-Looking Statements
2 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
Slide 3: Enterprise Financial Services Corp Operates in
3 Enterprise Financial Services Corp Operates in St. Louis Kansas City Phoenix New Mexico Los Angeles Las Vegas The Company has deposit and SBA loan production offices across the country. San Diego Dallas* Orlando Focused on Privately Owned Businesses and Business Owners Commercial Lending Lending V
Slide 4: Economic View of Regional Markets
4 Economic View of Regional Markets State/Metro Population (in millions)2 Unemployment Rate2 Average Household Income (in thousands)2 Gross Product (in billions)2 1Q24 YTD FY2023 Midwest Total Loans1 / Total Deposits $3.2 billion / $6.4 billion Missouri 6.3 3.86% $160 $453 St. Louis 2.8 3.96% $192 $
Slide 5: Executive Leadership Team
5 Executive Leadership Team JAMES B. LALLY 57, President & Chief Executive Officer, EFSC Enterprise Tenure – 21 years KEENE S. TURNER 45, SEVP, Chief Financial Officer, EFSC Enterprise Tenure – 11 years SCOTT R. GOODMAN 61, SEVP, President, Enterprise Bank & Trust Enterprise Tenure – 21 years DOUGLA
Slide 6: EFSC Awards and Recognition
6 EFSC Awards and Recognition Doing Well by Doing Good Award Promote community service, philanthropy and charitable giving to make a difference in the communities they service. Women in the Workplace Honoree Company policies, practices, development and data that show our commitment to supporting and
Slide 7: Flexible Balance Sheet - Well Managed and Positioned for Growth
7 Cycle to date asset beta of 34%4 Annual % change in NII: +100 bp 2.7% -100 bp (3.0)% Annual % change in NII including variable deposit servicing expense in NIE: +100 bp 1.3% -100 bp (1.6)% 60%* Adjustable rate loans High-quality, cash- flowing securities portfolio with 5.6 average duration Highly
Slide 8: Loan and Deposit Trends
8 $2.4 $2.8 $3.2 $4.1 $4.4 $5.3 $7.2 $9.0 $9.7 $10.9 $11.2 $2.5 $2.8 $3.2 $4.2 $4.6 $5.8 $8.0 $11.3 $10.8 $12.2 $13.1 EFSC Loans Acquired Loans EFSC Deposits Acquired Deposits 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $ In Billions 18.1 % 10 yr D epo sit G row th C AGR 1 (12. 5% 1 exc l
Slide 9: M&A Diversifies & Complements Organic Growth
9 M&A Diversifies & Complements Organic Growth M&A Strategy Growth History $5.3 $5.6 $7.3 $9.8 $13.5 $13.1 $14.5 $15.6 $4.4 $6.1 $8.5 $11.3 $0.9 $1.2 $1.3 $2.2 EFSC Assets Merger Contribution 2017 2018 2019 2020 2021 2022 2023 2024 $ In Billions Strategically enhanced geographic diversification and
Slide 10: Strengths vs KRX Peers
10 Strengths vs KRX Peers1 4Q24 NIM 3.27% 3.43% 4.13% KRX Median KRX Top Quartile EFSC AOCI Adjusted 10-Year TBV CAGR 7.3% 9.7% 11.1% KRX Median KRX Top Quartile EFSC 10-Year TTM EPS CAGR 6.3% 8.6% 13.5% KRX Median KRX Top Quartile EFSC NIB Deposits 25.6% 28.7% 34.1% KRX Median KRX Top Quartile EFSC
Slide 11: Value Proposition
11 Value Proposition EFSC Adding Shareholder Value Experience Performance Discipline • Tenured management team ◦ Average years of tenure: 16 years • Abundant industry experience ◦ Average years of industry experience: 23 years • Diversification across geographic regions and product lines • History o
Slide 12: Financial Highlights
Z ENTERPRISE Financial Services Corp Financial Highlights
Slide 13: Financial Highlights - 4Q24
13 *Comparisons noted below are to the linked quarter unless otherwise noted. **A Non-GAAP Measure, Refer to Appendix for Reconciliation. Capital • Tangible Common Equity/Tangible Assets** 9.05%, compared to 9.50% • Tangible Book Value Per Common Share** $37.27, compared to $37.26 • CET1 Ratio 11.8%
Slide 14: Financial Highlights, continued - 4Q24
14 *Comparisons noted below are to the linked quarter unless otherwise noted. Loans & Deposits • Loans $11.2 billion, up $140.5 million • Loan/Deposit Ratio 85.3% • Deposits $13.1 billion, up $681.2 million or $677.5 million excluding brokered CDs • Noninterest-bearing Deposits/Total Deposits 34% As
Slide 15: Financial Highlights, continued - 2024
15 Capital • Tangible Common Equity/Tangible Assets** 9.05%, compared to 8.96% • Tangible Book Value Per Share** $37.27, compared to $33.85, increase of 10% • Common stock dividend increased to $1.06 per share, compared to $1.00 per share • Repurchased 626,778 shares at an average price of $46.95 •
Slide 16: Total Loan Trends
16 Total Loan Trends $7,225 $9,018 $9,730 $10,884 $11,220 90.5% 79.5% 89.9% 89.4% 85.3% Loans PPP Loans/Deposits 2020 2021 2022 2023 2024 $ In Millions PPP $272 PPP $699 PPP $699
Slide 17: Loan Details
17 Loan Details 4Q24 3Q24 4Q23 Qtr Change LTM Change C&I $ 2,139 $ 2,145 $ 2,186 $ (6) $ (47) CRE Investor Owned 2,405 2,347 2,292 58 113 CRE Owner Occupied 1,305 1,323 1,262 (18) 43 SBA loans* 1,298 1,273 1,282 25 16 Sponsor Finance* 783 819 872 (36) (89) Life Insurance Premium Financing* 1,114 1,0
Slide 18: Loan By Region
18 Specialty Lending $3,898 $3,990 $4,109 4Q23 3Q24 4Q24 $ In Millions Midwest $3,338 $3,194 $3,201 4Q23 3Q24 4Q24 Southwest $1,566 $1,680 $1,784 4Q23 3Q24 4Q24 West $1,813 $1,940 $1,855 4Q23 3Q24 4Q24 Note: Excludes “Other” loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ,
Slide 19: Focused Loan Growth Strategies
19 Tax Credit Programs 6.8% Sponsor Finance 7.0% Life Insurance Premium Financing 9.9% SBA 11.6% Other 64.7% Focused Loan Growth Strategies Total Loans Lending verticals provide a competitive advantage, risk adjusted pricing and fee income opportunities. Tax Credit Programs $760 million in loans out
Slide 20: Loan Portfolio
20 Loan Portfolio Total $11.2 billion C&I 42.0% CRE 44.3% Construction 8.0% Residential 3.2% Other 2.5% Loans by Product Type Real Estate/ Rental/Leasing 25.9% Finance and Insurance 20.1% Accommodation/ Food Service 9.4% Manufacturing 6.7% Construction 5.2% Other Services 5.0% Other 27.7% Loans by I
Slide 21: Sponsor Finance
21 Sponsor Finance Administrative and Support 12.0% Construction 6.5% Health Care and Social Assistance 11.4% Manufacturing 24.5% Wholesale Trade 13.8% Other 31.8% Sponsor Finance Loans by Industry TypeSponsor Finance Loans & Deposits by Period $872.3 $865.2 $865.9 $819.1 $782.7 $403.0 $359.0 $360.0
Slide 22: Office CRE (Non-owner Occupied)
22 Office CRE (Non-owner Occupied) Total $513.7 million Midwest 47.4% Southwest 26.8% West 20.9% Specialty 4.9% Office CRE Loans by Location Real Estate/ Rental/Leasing 88.1% Health Care and Social Assistance 3.2% Other 8.7% Office CRE Loans by Industry Type Size Average Risk Rating Number of Loans
Slide 23: Allowance for Credit Losses for Loans
23 $139.8 $5.3 $(7.1) $138.0 ACL 3Q24 Portfolio Changes Net Charge-offs ACL 4Q24 Allowance for Credit Losses for Loans $ In Millions • New loans and changes in composition of existing loans • Changes in risk ratings, past due status and reserves on individually evaluated loans • Changes in macroecon
Slide 24: Credit Trends for Loans
24 Credit Trends for Loans 2024 2023 2022 2021 2020 NPLs/Loans 0.38 % 0.40 % 0.10 % 0.31 % 0.53 % NPAs/Assets 0.30 % 0.34 % 0.08 % 0.23 % 0.45 % Criticized & Classified Loans/Loans 4.79 % 4.06 % 4.09 % 5.52 % 6.42 % ACL/NPLs 323.2 % 308.2 % 1371.90 % 517.60 % 354.90 % ACL/Loans* 1.34 % 1.35 % 1.56 %
Slide 25: Investment Portfolio Breakout
25 Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 10% Obligations of states and political subdivisions 42% Agency mortgage- backed securities, 39% Corporate debt securities 4% U.S. Treasury bills 5% TOTAL $2.9 billion • Effective duration of
Slide 26: EFSC Borrowing Capacity
26 EFSC Borrowing Capacity $5.1 $5.3 $5.5 $1.2 $1.2 $1.3 $2.6 $2.6 $2.8 $0.1 $0.1 $0.1$1.2 $1.4 $1.3 42% 43% 42% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 2Q24 3Q24 4Q24 $ In Billions End of Period and Average Loans to Deposits 89
Slide 27: 4Q24 Deposit Mix
27 34.0% 40.4% 42.9% 32.5% 34.1% 34% 31%11% 24% $7,985 $11,344 $10,829 $12,176 $13,146 0.32% 0.11% 0.27% 1.58% 2.12% Deposits Cost of deposits Noninterest bearing % 2020 2021 2022 2023 2024 CD Interest-Bearing Demand Accounts DDA MMA & Savings $ In Millions Total Deposits $13.1 billion 4Q24 Deposit
Slide 28: Deposit Details
28 Deposit Details 4Q24 3Q24 4Q23 Qtr Change LTM Change Noninterest-bearing demand accounts $ 4,484 $ 3,934 $ 3,959 $ 550 $ 525 Interest-bearing demand accounts 3,175 3,049 2,950 126 225 Money market accounts 3,564 3,568 3,399 (4) 165 Savings accounts 553 553 595 — (42) Certificates of deposit: Brok
Slide 29: Deposit By Region
29 Deposit Verticals $2,778 $3,093 $3,388 4Q23 3Q24 4Q24 $ In Millions Midwest* $6,219 $6,205 $6,433 4Q23 3Q24 4Q24 Southwest $1,828 $1,971 $2,057 4Q23 3Q24 4Q24 West* $1,351 $1,196 $1,268 4Q23 3Q24 4Q24 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), W
Slide 30: Differentiated Deposit Verticals
30 Differentiated Deposit Verticals 36.7% 36.1% 27.2% Community Associations $1.2 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $1.2 billion in deposits. Specializing in the compliance of Property Management Trust Accounts. Legal
Slide 31: Core Funding Mix
31 32% 34% 28% 38% 32% 20% 4% 7% 31% 24% 18% 19% 1% Core Funding Mix Commercial Business Banking Consumer $ In Millions $2,603$1,492$4,946 1At December 31, 2024. Note: Brokered deposits: 4Q24 $0.7 billion; 3.71% cost of funds Deposit Verticals $3,388 64%6% 29% 4Q24 Total Portfolio Average Account Si
Slide 32: Capital Strategy
32 Capital Strategy EFSC Capital Strategy: Low Cost - Highly Flexible High Capital Retention Rate Supports Robust Asset Growth Maintain High Quality Capital Stack Maintain 8-9% TCE • Strong earnings profile • Sustainable dividend profile • Organic loan and deposit growth • High quality M&A to enhanc
Slide 33: Capital: TBV and Common Dividends per Share
33 Capital TBV* and Common Dividends per Share $25.48 $28.28 $28.67 $33.85 $37.27 $0.72 $0.75 $0.90 $1.00 $1.06 TBV/Share Dividends per Share 2020 2021 2022 2023 2024 Return of Capital $35.1 $86.8 $66.5 $37.4 $69.2 $19.8 $26.2 $33.6 $37.4 $39.6 $15.3 $60.6 $32.9 $29.6 Common dividend payments Share
Slide 34: Regulatory Capital
34 Regulatory Capital 10.0% 14.0% 14.9% 14.7% 14.2% 14.2% 14.6% 6.5% 10.0% 10.9% 11.3% 11.1% 11.3% 11.8% 9.3% 10.1% 10.4% CET1 Tier 1 Total Risk Based Capital CET1 excluding unrealized losses* Minimum "Well Capitalized" Ratio Optimal Capital Levels 2020 2021 2022 2023 2024 8.0% 12.6% 12.7% 12.1% 13.
Slide 35: Earnings Per Share Trend - 4Q24
35 Earnings Per Share Trend - 4Q24 $1.32 $0.05 $(0.06) $(0.03) $1.28 3Q24 Operating Revenue Provision for Credit Losses Noninterest Expense 4Q24 Change in Diluted EPS
Slide 36: Earnings Per Share Trend - 2024
36 $5.07 $0.14 $0.32 $(0.77) $(0.01) $0.08 $4.83 2023 Operating Revenue Provision for Credit Losses Noninterest Expense Changes in Shares / ETR Change in Effective Tax Rate 2024 Change in Diluted EPS Earnings Per Share Trend - 2024
Slide 37: Net Interest Income Trend
37 Net Interest Income Trend $ In Millions $270.0 $360.2 $473.9 $562.6 $568.1 3.56% 3.41% 3.89% 4.43% 4.16% 0.36% 0.08% 1.68% 5.03% 5.15% Net Interest Income Net Interest Margin Avg Federal Funds Rate 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Net Interest Income - FTE $ 273.2 $ 365.3 $ 480.9
Slide 38: Noninterest Income Trend
38 Noninterest Income Trend $ In Millions $54.5 $67.7 $59.2 $68.7 $69.7 $17.0 $22.1 $16.7 $22.9 $22.0 $6.6 $8.0 $2.6 $9.2 $9.0 $11.7 $15.4 $18.3 $16.6 $18.3$9.5 $11.9 $11.6 $10.0 $10.0 $9.7 $10.3 $10.0 $10.0 $10.4 16.8% 15.8% 11.1% 10.9% 10.9% Other Tax Credit Income Deposit Services Charge Card Ser
Slide 39: Noninterest Expense Trend
39 Noninterest Expense Trend $167.2 $245.9 $274.2 $348.2 $385.0 $57.2 $65.0 $78.5 $94.8 $93.0 $4.9 $14.2 $31.1 $72.3 $88.6 $4.2 $22.1 $92.3 $124.9 $147.0 $164.6 $181.3 $3.4 $13.5 $16.3 $17.6 $16.5 $17.2 48.7% 49.7% 49.8% 53.4% 58.4% Other Core conversion expenses Deposit costs Merger-related expense
Slide 40: Appendix
Zz ENTERPRISE inancial Services Corp \ Appendix
Slide 41: ESG Highlights
41 ■ Selected by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury to receive $353 million of New Markets Tax Credits allocations since 2011. ■ In 2023, our portfolio included the financing of over $2.1 billion in small business, small farm and
Slide 42: Best-In-Class Technology Partnerships
42 Best-In-Class Technology Partnerships Client journey supported by a competitive digital product set. Customer surveys Salesforce integrated with core for 360 client view Client Portal Online Banking integrated with treasury products Integrations for APIs for HOA/PM Positive Pay (Check & ACH) TARG
Slide 43: Use of Non-GAAP Financial Measures
43 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 commo
Slide 44: Reconciliation of Non-GAAP Financial Measures
44 Reconciliation of Non-GAAP Financial Measures Tangible Common Equity Ratio At (in thousands, except per share data) December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Shareholders' equity (GAAP) $ 1,824,002 $ 1,832,011 $ 1,716,068 $ 1,522,
Slide 45: Allowance Coverage Ratio Adjusted for Guaranteed Loans
45 Allowance Coverage Ratio Adjusted for Guaranteed Loans At ($ in thousands) December 31, 2024 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Loans (GAAP) $ 11,220,355 $ 10,884,118 $ 9,737,138 $ 9,017,642 $ 7,224,935 Less guaranteed loans, net 947,665 932,118 960,254 1,151,
Slide 46: Year ended ($ in thousands) December 31, 2024 December , 2023 December 31, 2022
46 Year ended ($ in thousands) December 31, 2024 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Net interest income (GAAP) $ 568,096 $ 562,592 $ 473,903 $ 360,194 $ 270,001 Tax-equivalent adjustment 8,445 8,079 7,042 5,151 3,190 Less incremental accretion income — — — — 4,08
Slide 47: Reconciliation of Non-GAAP Financial Measures
47 Reconciliation of Non-GAAP Financial Measures Quarter ended Year Ended ($ in thousands) December 31, 2024 September 30, 2024 December 31, 2024 December 31, 2023 Average shareholder’s equity $ 1,844,509 $ 1,804,369 $ 1,784,175 $ 1,623,121 Less average preferred stock 71,988 71,988 71,988 71,988 Le
Slide 48: Enterprise Financial Services Corp
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Enterprise Financial Services — Q4 2024 Earnings Presentation on 6ix