Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q4 2022 Earnings Presentation
28 slides from Enterprise Financial Services's earnings presentation, Jan 23, 2023
Slide 1: 2022 Fourth Quarter Earnings Webcast
Enterprise Financial Services Corp 2022 Fourth Quarter Earnings Webcast Exhibit 99.2
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 - 4Q22
Financial Highlights - 4Q22* Capital • Tangible Common Equity/Tangible Assets** 8.43%, compared to 7.86% • Tangible Book Value Per Share** $28.67, compared to $26.62 • CET1 Ratio 11.1%, compared to 11.0% • Quarterly common stock dividend increased $0.01 to $0.25 per share in first quarter 2023 • Qua
Slide 4: Financial Highlights, continued - 4Q22
Financial Highlights, continued - 4Q22* *Comparisons noted below are to the linked quarter unless otherwise noted. Loans & Deposits • Loans $9.7 billion, up $382.2 million • Loan/Deposit Ratio 90% • Deposits $10.8 billion, down $228.4 million • Noninterest-bearing Deposits/Total Deposits 43% Asset Q
Slide 5: Financial Highlights - 2022
Financial Highlights - 2022* Capital • Tangible Common Equity/Tangible Assets** 8.43%, compared to 8.13% • Tangible Book Value Per Share** $28.67, compared to $28.28 • Common stock dividend increased to $0.90 per share, compared to $0.75 per share • Repurchased 700,473 shares at average price of $47
Slide 6: 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 6
Slide 7: Total Loan Trends
$9,018 $9,056 $9,269 $9,355 $9,737 4Q21 1Q22 2Q22 3Q22 4Q22 In Millions 11% Total Loan Growth* *Excluding PPP Total Loan Trends PPP $134PPP $272 PPP $13 PPP $49 PPP $7 7
Slide 8: Loan Details - LTM
Loan Details - LTM 4Q22 4Q21 LTM Change C&I $ 1,905 $ 1,479 $ 426 CRE Investor Owned 2,176 1,955 221 CRE Owner Occupied 1,174 1,113 61 SBA loans* 1,312 1,241 71 Sponsor Finance* 635 508 127 Life Insurance Premium Finance* 817 653 164 Tax Credits* 560 487 73 Residential Real Estate 380 431 (51) Const
Slide 9: Loan Details - QTR
Loan Details - QTR 4Q22 3Q22 QTR Change C&I $ 1,905 $ 1,781 $ 124 CRE Investor Owned 2,176 2,106 70 CRE Owner Occupied 1,174 1,133 41 SBA loans* 1,312 1,269 43 Sponsor Finance* 635 650 (15) Life Insurance Premium Finance* 817 780 37 Tax Credits* 560 508 52 Residential Real Estate 380 382 (2) Constru
Slide 10: Total Loans By Region
Total Loans By Region Specialty Lending $2,813 $3,241 $3,382 4Q21 3Q22 4Q22 In Millions Midwest $2,939 $3,115 $3,214 4Q21 3Q22 4Q22 Southwest $1,084 $1,161 $1,242 4Q21 3Q22 4Q22 Note: Excludes PPP and Other loans. Certain prior period amounts have been reclassified among the categories to conform to
Slide 11: Deposit Details - LTM
Deposit Details - LTM 4Q22 4Q21 LTM Change Noninterest-bearing demand accounts $ 4,643 $ 4,579 $ 64 Interest-bearing demand accounts 2,256 2,466 (210) Money market accounts 2,655 2,891 (236) Savings accounts 744 800 (56) Certificates of deposit: Brokered 119 129 (10) Other 412 479 (67) Total deposit
Slide 12: Deposit Details - QTR
Deposit Details - QTR 4Q22 3Q22 QTR Change Noninterest-bearing demand accounts $ 4,643 $ 4,643 $ — Interest-bearing demand accounts 2,256 2,271 (15) Money market accounts 2,655 2,793 (138) Savings accounts 744 824 (80) Certificates of deposit: Brokered 119 129 (10) Other 412 398 14 Total deposits $
Slide 13: Total Deposits By Region
Total Deposits By Region Specialty Deposits $2,222 $2,422 $2,524 4Q21 3Q22 4Q22 In Millions Midwest $5,525 $5,221 $4,940 4Q21 3Q22 4Q22 Southwest $1,848 $1,827 $1,845 4Q21 3Q22 4Q22 West $1,749 $1,588 $1,520 4Q21 3Q22 4Q22 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM
Slide 14: Specialty Deposits
Specialty Deposits 39.5% 23.4% 14.9% 2.8% 19.4% Community Associations $998 million in deposit accounts specifically designed to serve the needs of community associations. Property Management $589 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party
Slide 15: Earnings Per Share Trend - 4Q22
Earnings Per Share Trend - 4Q22 $1.32 $0.46 $(0.03) $(0.17) $1.58 3Q22 Operating Revenue Provision for Credit Losses Noninterest Expense 4Q22 Change in EPS 15
Slide 16: Net Interest Income Trend
$102.1 $101.2 $109.6 $124.3 $138.8 3.32% 3.28% 3.55% 4.10% 4.66% 0.08% 0.12% 0.76% 2.20% 3.65% Net Interest Income PPP Income Net Interest Margin Avg Fed Funds Rate 4Q21 1Q22 2Q22 3Q22 4Q22 Net Interest Income Trend In Millions 35.9% NII Growth PPP Income $2.9 PPP Income $1.6 PPP Income $0.5 PPP Inc
Slide 17: Net Interest Margin
Net Interest Margin 4.32% 4.34% 4.51% 5.10% 5.87% 2.30% 2.31% 2.51% 2.65% 2.91% 0.15% 0.19% 0.71% 2.17% 3.35% 3.50% 3.45% 3.76% 4.47% 5.25% Earning asset yield Interest-earning deposit yield Securities yield Loan yield 4Q21 1Q22 2Q22 3Q22 4Q22 0.17% 0.17% 0.24% 0.54% 0.94% 0.10% 0.10% 0.13% 0.31% 0.
Slide 18: Credit Trends for Loans
Credit Trends for Loans 14 7 (1) 2 9 4Q21 1Q22 2Q22 3Q22 4Q22 $68 $176 $298 $122 $388 $(167) $(138) $(85) $(36) $(6) 39.9% 39.9% 43.9% 42.5% 41.0% Organic Loans PPP Loans Avg Line Draw % 4Q21 1Q22 2Q22 3Q22 4Q22 4Q22 3Q22 4Q21 NPLs/Loans 0.10% 0.19% 0.31% NPAs/Assets 0.08% 0.14% 0.23% ACL/NPLs 1371.
Slide 19: Allowance for Credit Losses for Loans
$140.5 $(1.5) $(2.1) $136.9 ACL 3Q22 Portfolio Changes Net Charge-offs ACL 4Q22 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 macroeconomi
Slide 20: Noninterest Income Trend
Noninterest Income Trend Other Fee Income DetailFee Income In Millions $9.5 $22.6 $18.6 $14.2 $16.9 $2.7 $2.6 $2.5 $2.4 $2.4 $3.9 $4.2 $4.8 $5.0 $4.5 $3.2 $3.0 $3.5 $2.7 $2.3 $8.4 $6.2 $2.2 $3.0 $5.3 $4.4 $2.6 $1.2 $(3.6) $2.4 18.1% 15.6% 11.5% 7.1% 10.8% Wealth Management Deposit Services Charge Ca
Slide 21: Operating Expenses Trend
Operating Expenses Trend Other Operating Expenses DetailOperating Expenses In Millions $62.8 $65.4 $68.8 $77.1 $63.7 $23.4 $22.4 $25.1 $27.3 $34.7 $4.5 $4.6 $4.3 $4.5 $4.2 $33.5 $35.8 $36.0 $37.0 $38.2 $2.3 47.5% 50.6% 51.1% 49.8% 48.1% Other Occupancy Employee compensation and benefits Merger-relat
Slide 22: Capital
Capital Tangible Common Equity/Tangible Assets* 8.13% 7.62% 7.80% 7.86% 8.43% Tangible Common Equity/Tangible Assets 4Q21 1Q22 2Q22 3Q22 4Q22 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. Regulatory Capital 10.0% 14.7% 14.4% 14.2% 14.2% 14.2% 6.5% 11.3% 11.0% 10.9% 11.0% 11.1% CET1 Tier
Slide 23: Appendix
Appendix Fourth Quarter 2022 Earnings Webcast
Slide 24: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands, except per share data) Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,522,263 $ 1,446,218 $ 1,447
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended ($ in thousands) Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021 CALCULATION OF PRE-PROVISION NET REVENUE Net interest income $ 138,835 $ 124,290 $ 109,613 $ 101,165 $ 102,060 $ 473,903
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 CORE EFFICIENCY RATIO Net interest income (GAAP) $ 138,835 $ 124,290 $ 109,613 $ 101,165 $ 102,060 Tax-equivalent adjustment 1,983 1,854 1,699 1,506 1,507 Net
Slide 28: Q & A
Q & A Fourth Quarter 2022 Earnings Webcast
Enterprise Financial Services — Q4 2022 Earnings Presentation on 6ix