Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q1 2020 Earnings Presentation
32 slides from Enterprise Financial Services's earnings presentation, Apr 21, 2020
Slide 1: Enterprise Financial Services Corp 2020 First Quarter Earnings Webcast
Exhibit 99.2 Enterprise Financial Services Corp 2020 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: Timeline of Actions: Key Milestones
Timeline of Actions: Key Milestones MONITOR & PLANIMPLEMENTATION ACTIVATION JAN. 23 FEB. 27 MAR. 10 MAR. 23 APR. 3 Discussions begin Developed COVID‐19 Restricted travel and Various internal Bank launches about virus Communication and began canceling in‐person controls adjusted for SBA Paycheck Acti
Slide 4: Associate Protection & Assistance
Associate Protection & Assistance Regular pay for associates unable to work from home due to COVID‐ 19 related illness, caring for ill family member or childcare school closures Enterprise Bank & Trust Foundation’s Health benefits expanded to cover COVID‐19 related issues Enterprise Cares: Associate
Slide 5: Community and Client Programs
Community and Client Programs Programs launched As a preferred provider of SBA Section 7(a) loans, we provided to provide temporary a live client virtual event to walk through SBA Loan Relief Programs. (2,500 attendees, 500+ webinar downloads) relief for those hit hard by the pandemic Donated $50,00
Slide 6: Mission and Vision
Mission and Vision Our Mission Guiding people to a lifetime of financial success Our Vision To be a company where our associates are proud to work, that delivers ease of navigation to our customers and value to our investors, while helping our communities flourish 6
Slide 7: Total Loan Trends
Total Loan Trends In Millions 9% Total Loan Growth $5,458 $5,314 $5,228 $5,149 $5,017 Q1' 19 Q2' 19 Q3' 19 Q4' 19 Q1' 20 7
Slide 8: Commercial & Industrial Loan Trends
Commercial & Industrial Loan Trends 11% C&I Growth In Millions $2,469 $2,361 $2,303 $2,265 $2,227 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 8
Slide 9: Loan Details
Loan Details Q1 ’20 Q4 ’19 QTR Q1 ’19 LTM In Millions Change Change C&I - General $ 1,186 $ 1,187 $ (1) $ 1,129 $ 57 CRE, Investor Owned - General 1,319 1,290 29 1,183 136 CRE, Owner Occupied - General 585 582 3 576 9 Enterprise Value Lending1 441 429 12 440 1 Life Insurance Premium Financing1 497 4
Slide 10: Total Loans By Business Unit
Total Loans By Business Unit In Millions Specialized Lending St.Louis Kansas City $2,463 $2,568 $1,003 $1,039 $2,273 $832 $979 $730 $816 Q1 '19 Q4 '19 Q1 '20 Q1 '19 Q4 '19 Q1 '20 Q1 '19 Q4 '19 Q1 '20 Arizona New Mexico $682 $640 $636 $353 $392 $383 Q1 '19 Q4 '19 Q1 '20 Q1 '19 Q4 '19 Q1 '20 10
Slide 11: Deposit Trend
Deposit Trend 23.0% 23.0% 22.6% 21.4% 21.3% $5,990 In Millions $5,771 $5,624 $5,537 $5,559 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Deposits Noninterest-bearing % u Last Twelve Months Growth Rate = 8% 11
Slide 12: SBA Paycheck Protection Program (PPP)
SBA Paycheck Protection Program (PPP) Enterprise is proud to support our small business clients impacted by the COVID‐19 pandemic through participation in the SBA PPP. Processed over 1,500 applications from small business owners Our Focus Dedicated team of our most experienced associates focused sin
Slide 13: Loan Portfolio
Loan Portfolio Loans by Product Type Loans by Industry Type Other Services CRE 34.9% 28.2% Accommodation & Food Service 5.4% Real Estate/ Construction 8.2% Rental/Leasing Wholesale Trade 28.9% 6.0% Residential 6.3% Other Services 7.0% Consumer 2.1% Finance and C&I 21.7% Manufacturing 7.8% Insurance
Slide 14: C&I and Commercial Real Estate by Industry
C&I and Commercial Real Estate by Industry C&I Loans by Industry Investor Owned CRE Loans by Industry Accommodation, Other Finance and Food Service 24.4% Insurance 10.5% 34.7% Health Care, Retail Trade Total Real Estate/ Total Social Assistance 4.5% $2.5 Billion Rental/Leasing $1.3 Billion 6.1% Real
Slide 15: Enterprise Value Lending (EVL)
Enterprise Value Lending (EVL) Total $441 Million EVL Loans by Industry EVL Loans by Location Southeast Other Manufacturing 21.0% 17.1% 34.4% Midwest 40.0% Arts & West Entertainment Professional 11.0% 4.0% Technical Construction 15.1% 4.8% Northeast 16.0% Wholesale Southwest Waste Management 12.0% 1
Slide 16: Hospitality Loans
Hospitality Loans Total $358 Million Hospitality Loans by Product Type Hospitality Loans by Subsector Commercial Real Estate Hotels and 55.1% Campgrounds C&I 61.0% 14.0% Tax Credits 3.9% Food and Drink EVL 4.9% Amusement, Construction Services Gambling, and 22.1% 20.9% Recreation 18.1% Hospitality L
Slide 17: Energy-Related Loans
Energy-Related Loans Total $140 Million Energy‐Related Loans by Product Type Energy‐Related Loans by Subsector Merchant Aircraft C&I Wholesaler 3.4% 53.6% Professional 31.7% 3.4% EVL 12.4% Other 9.2% Manufacturing Residential/ 22.4% Consumer Utilities 0.7% 7.6% Construction Transportation CRE 24.2%
Slide 18: Agricultural Lending
Agricultural Lending Total $168 Million Agricultural Lending Agricultural Lending Hog & Pig C&I Farming 20.2% Other 28.3% 10.4% CRE ‐ Owner Misc Crop Corn Farming Occupied 21.5% 79.8% 10.0% Soybean Farming 5.6% Beef Cattle Dairy Cattle 18.3% 5.9% Agricultural Loans by Size $ In Millions Experience
Slide 19: Auto Dealer & Aircraft Lending
Auto Dealer & Aircraft Lending Total $175 Million Auto Dealer & Aircraft Auto Dealer & Aircraft Lending Aircraft Finance 53.5% Other 9.0% C&I Manufacturing 2.7% 4.4% Transportation & Warehousing Retail Trade 4.8% 75.5% CRE‐Owner Occupied Real Estate, 43.8% Rental, Leasing 6.3% Auto Dealer & Aircraft
Slide 20: Loans Secured by Marketable Securities
Loans Secured by Marketable Securities Total $609 Million Marketable Security Loans by Type Marketable Security Loans by Subsector Agricultural 1.2% Other C&I 11.4% 9.6% Finance & Other Insurance 5.7% Management 6.0% 82.6% CRE‐Investor Owned Life Insurance 1.9% Premium Finance 81.6% Marketable Secur
Slide 21: Earnings Per Share Trend - Q1 2020
Earnings Per Share Trend - Q1 2020 Change in EPS $0.03 $0.02 $1.09 $0.01 $(0.63) $(0.03) $(0.01) $0.48 Q4 '19 Net Interest Incremental Credit Loss Noninterest Noninterest Change in Q1 '20 Income Accretion Provision Income Expense Shares/ ETR 21
Slide 22: Net Interest Income Trend
Net Interest Income Trend 3.79% 3.80% 3.69% 3.64% 3.71% In Millions $63.4 $61.7 $63.0 $61.6 $60.8 $60.9 $61.0 $62.1 $52.3 $51.2 21% Core NII Growth Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Core Net Interest Income* Incremental Accretion On Non-core Acquired Assets FTECore Net Interest Margin* Note: * A No
Slide 23: CECL Impact
CECL Impact Allowance for Reserve for Classified Unfunded Nonperforming Loan Losses Loans Assets In Thousands Commitments Balance, 12/31/2019 $ 43,288 $ 430 $ 26,425 $ 85,897 CECL adoption1 28,387 2,413 8,462 25,819 PCD loans immediately ) ) ) charged-off2 (1,680 — (1,680 (1,680 Balance, 1/1/2020 69
Slide 24: Credit Trends for Loans
Credit Trends for Loans Net Charge-offs (annualized) Total Loan Growth (1) In Millions 53.2% 55.3% 44.3% 46.2% 47.3% $132 $143 19bps 16 bps $79 $86 8bps 8 bps 9 bps $(15) Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Growth Line Draw % Provision for Credit Losses In Millions
Slide 25: Noninterest Income Trend
Noninterest Income Trend In Millions Fee Income Other Fee Income Detail $14.4 $13.6 $13.4 $1.2 $12.0 $3.4 $2.0 $0.6 $4.0 $4.0 $3.6 $2.9 $9.2 $2.7 $3.6 $1.0 $0.2 $0.2 $0.2 $2.9 $2.4 $0.2 $2.7 $2.3 $2.5 $2.4 $0.4 $0.2 $2.2 $1.1 $2.3 $0.2 $0.2 $0.4 $1.8 $0.3 $0.4 $0.2 $0.1 $0.3 $0.8 $3.4 $3.2 $3.3 $3.1
Slide 26: Operating Expenses Trend
Operating Expenses Trend 54.1% 53.3% 51.7% 50.7% 51.2% In Millions $49.1 $10.3 $39.8 $38.2 $38.4 $38.7 $7.3 $0.4 $20.7 $20.8 $20.4 $21.7 $19.4 $3.2 $3.2 $3.5 $3.3 $2.6 $14.9 $13.8 $14.5 $13.7 $10.5 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Other Occupancy Employee compensation and benefits Merger-related e
Slide 27: Capital
Capital Tangible Common Equity/Tangible Assets* Q1 2020 Holding Company Capital Uses (Annualized) In Thousands $19,076 8.89% $14,496 8.35% 8.43% 8.54% 8.42% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Debt Service Dividends Regulatory Capital 12.86% 12.62% 12.72% 12.90% 12.85% 10.00% 11.25% 11.06% 11.17% 11.
Slide 28: First Quarter 2020 Earnings Webcast Appendix
First Quarter 2020 Earnings Webcast Appendix
Slide 29: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as adjusted EPS, cor
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ($ in thousands) 2020 2019 2019 2019 2019 CORE PERFORMANCE MEASURES Net interest income $ 63,368 $ 61,613 $ 63,046 $ 61,715 $ 52,343 Less: Incremental accretion income 1,273 576 2,140 910 1,157 Core n
Slide 31: 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) 2020 2019 2019 2019 2019 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 846,436 $ 867,185 $ 846,095 $ 825,501 $ 797,835 Less
Slide 32: First Quarter 2020 Earnings Webcast Q & A
First Quarter 2020 Earnings Webcast Q & A
Enterprise Financial Services — Q1 2020 Earnings Presentation on 6ix