46 slides from Enterprise Financial Services's earnings presentation, Aug 6, 2024
Slide 1: Enterprise Financial Services Corp 2024 Second Quarter Investor Presentation
Enterprise Financial Services Corp 2024 Second Quarter Investor Presentation Exhibit 99.1
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: Enterprise Financial Services Corp Operates in...
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 Ver
Slide 4: Economic View of Regional Markets
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 $3.3 billion / $6.1 billion Missouri 6.2 3.31% $156 $435 St. Louis 2.8 3.40% $185 $22
Slide 5: EFSC Awards and Recognition
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 a
Slide 6: Flexible Balance Sheet - Well Managed and Positioned for Growth
Cycle to date asset beta of 53% Annual % change in NII: +100 bp 3.8% -100 bp (3.9)% Annual % change in NII including variable deposit servicing expense in NIE: +100 bp 2.0% -100 bp (2.0)% 61%* Adjustable rate loans High-quality, cash- flowing securities portfolio with 5.1 average duration Loan portf
Slide 7: Loan and Deposit Trends
$2.4 $2.8 $3.2 $4.1 $4.4 $5.3 $7.2 $9.0 $9.7 $10.9 $11.0 $2.5 $2.8 $3.2 $4.2 $4.6 $5.8 $8.0 $11.3 $10.8 $12.2 $12.3 EFSC Loans Acquired Loans EFSC Deposits Acquired Deposits 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2Q24 $ In Billions 17.4 % 1 0 yr Dep osit Gro wth CAG R1 (11. 5% 1 exc ludi
Slide 8: M&A Diversifies & Complements Organic Growth
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 $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 $ In Billions Strategically enhanced geographic diversification and product lines
Slide 9: Strengths vs KRX Peers
Strengths vs KRX Peers1 2Q24 NIM 3.23% 3.49% 4.19% KRX Median KRX Top Quartile EFSC 10-Year TBV CAGR 5.2% 8.0% 10.0% KRX Median KRX Top Quartile EFSC 10-Year EPS CAGR 7.0% 10.3% 13.6% KRX Median KRX Top Quartile EFSC NIB Deposits 26.0% 30.4% 32.0% KRX Median KRX Top Quartile EFSC Time Deposits 16.3%
Slide 10: Value Proposition
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 of s
Slide 11: Financial Highlights
Z ENTERPRISE Financial Services Corp Financial Highlights
Slide 12: Financial Highlights - 2Q24
Financial Highlights - 2Q24* Capital • Tangible Common Equity/Tangible Assets** 9.18%, compared to 9.01% • Tangible Book Value Per Common Share** $35.02, compared to $34.21 • CET1 Ratio 11.7%, compared to 11.4% • Repurchased 225,135 shares at an average price of $38.07 • Quarterly common stock divid
Slide 13: Financial Highlights, continued - 2Q24
Financial Highlights, continued - 2Q24* *Comparisons noted below are to the linked quarter unless otherwise noted. **A Non-GAAP Measure, Refer to Appendix for Reconciliation. Loans & Deposits • Loans $11.0 billion, down $28.5 million • Loan/Deposit Ratio 90% • Deposits $12.3 billion, up $28.7 millio
Slide 14: Total Loan Trends
Total Loan Trends $7,225 $9,018 $9,737 $10,884 $11,000 90.5% 79.5% 89.9% 89.4% 89.6% Loans PPP Loans/Deposits 2020 2021 2022 2023 2Q24 $ In Millions PPP $272 PPP $699 14
Slide 15: Loan Details
Loan Details 2Q24 1Q24 2Q23 Qtr Change LTM Change C&I $ 2,107 $ 2,264 $ 2,029 $ (157) $ 78 CRE Investor Owned 2,309 2,281 2,291 28 18 CRE Owner Occupied 1,314 1,280 1,209 34 105 SBA loans* 1,269 1,275 1,328 (6) (59) Sponsor Finance* 866 865 880 1 (14) Life Insurance Premium Financing* 996 1,004 912
Slide 16: Loans By Region
Loans By Region Specialty Lending $3,734 $3,918 $3,959 2Q23 1Q24 2Q24 $ In Millions Midwest $3,320 $3,412 $3,279 2Q23 1Q24 2Q24 Southwest $1,415 $1,605 $1,649 2Q23 1Q24 2Q24 Note: Excludes “Other” loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), West (S
Slide 17: Focused Loan Growth Strategies
Tax Credit Programs 6.7% Sponsor Finance 7.9% Life Insurance Premium Financing 9.1% SBA 11.5% Other 64.8% Focused Loan Growth Strategies Total Loans Lending verticals provide a competitive advantage, risk adjusted pricing and fee income opportunities. Tax Credit Programs $738 million in loans outsta
Slide 18: Loan Portfolio
Loan Portfolio Total $11.0 billion C&I 42.0% CRE 44.2% Construction 8.1% Residential 3.2% Other 2.5% Loans by Product Type Real Estate/ Rental/Leasing 25.9% Finance and Insurance 18.9% Accommodation/ Food Service 9.3% Manufacturing 6.6% Construction 5.8% Other Services 4.9% Other 28.6% Loans by Indu
Slide 19: Sponsor Finance
Sponsor Finance Administrative and Support 10.4% Construction 8.9% Health Care and Social Assistance 11.9% Manufacturing 22.3% Wholesale Trade 11.7% Other 34.8% Sponsor Finance Loans by Industry TypeSponsor Finance Loans & Deposits by Period $879.5 $888.0 $872.3 $865.2 $865.9 $307.3 $375.9 $403.0 $3
Slide 20: Office CRE (Non-owner Occupied)
Office CRE (Non-owner Occupied) Total $491.7 million Midwest 49.0% Southwest 28.0% West 18.0% Specialty 5.0% Office CRE Loans by Location Real Estate/ Rental/Leasing 86.3% Health Care and Social Assistance 3.5% Other 10.2% Office CRE Loans by Industry Type Size Average Risk Rating Number of Loans Ba
Slide 21: Allowance for Credit Losses for Loans
$135.5 $4.6 $(0.6) $139.5 ACL 1Q24 Portfolio Changes Net Charge-offs ACL 2Q24 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 22: Credit Trends for Loans
Credit Trends for Loans 2Q24 YTD 2023 2022 2021 2020 NPLs/Loans 0.36 % 0.40 % 0.10 % 0.31 % 0.53 % NPAs/Assets 0.33 % 0.34 % 0.08 % 0.23 % 0.45 % Criticized & Classified Loans/Loans 4.62 % 4.06 % 4.09 % 5.52 % 6.42 % ACL/NPLs 354.1 % 308.2 % 1371.90 % 517.60 % 354.90 % ACL/Loans* 1.38 % 1.35 % 1.56
Slide 23: Investment Portfolio Breakout
Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 13% Obligations of states and political subdivisions 42% Agency mortgage- backed securities, 32% Corporate debt securities 6% U.S. Treasury bills 7% TOTAL $2.4 billion • Effective duration of 5.1
Slide 24: EFSC Borrowing Capacity
EFSC Borrowing Capacity $4.4 $5.1 $5.1 $1.0 $1.3 $1.2 $2.5 $2.6 $2.6 $0.1 $0.1 $0.1$0.8 $1.1 $1.2 37% 42% 42% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 4Q23 1Q24 2Q24 $ In Billions End of Period and Average Loans to Deposits 91% 8
Slide 25: Total Deposits and Deposit Mix
34.0% 40.4% 42.9% 32.5% 32.0% 32% 33%11% 24% $7,985 $11,344 $10,829 $12,176 $12,282 0.32% 0.11% 0.27% 1.58% 2.16% Deposits Cost of deposits Noninterest bearing % 2020 2021 2022 2023 2Q24 CD Interest-Bearing Demand Accounts DDA MMA & Savings $ In Millions Total Deposits $12.3 billion 2Q24 Deposit Mix
Slide 26: Deposit Details
Deposit Details 2Q24 1Q24 2Q23 Qtr Change LTM Change Noninterest-bearing demand accounts $ 3,928 $ 3,805 $ 3,881 $ 123 $ 47 Interest-bearing demand accounts 2,952 2,956 2,629 (4) 323 Money market accounts 3,474 3,431 2,913 43 561 Savings accounts 565 576 665 (11) (100) Certificates of deposit: Broke
Slide 27: Deposits By Region
Deposits By Region Deposit Verticals** $2,474 $2,901 $3,033 2Q23 1Q24 2Q24 $ In Millions Midwest(*)** $6,027 $6,206 $6,111 2Q23 1Q24 2Q24 Southwest $1,811 $1,886 $1,984 2Q23 1Q24 2Q24 West* $1,308 $1,261 $1,154 2Q23 1Q24 2Q24 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ,
Slide 28: Differentiated Deposit Verticals
Differentiated Deposit Verticals 38.6% 34.6% 26.8% Community Associations $1.2 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $1.0 billion in deposits. Specializing in the compliance of Property Management Trust Accounts. Legal Ind
Slide 29: Core Funding Mix
Core Funding Mix Commercial Business Banking Consumer $ In Millions $2,733$1,399$4,386 1At June 30, 2024 2Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated accounts. Note: Brokered deposits were $0.7 billion at 2
Slide 30: Capital Strategy
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 enhance c
Slide 31: Capital: TBV and Common Dividends per Share
Capital TBV* and Common Dividends per Share $25.48 $28.28 $28.67 $33.85 $35.02 $0.72 $0.75 $0.90 $1.00 $0.51 TBV/Share Dividends per Share 2020 2021 2022 2023 2Q24 YTD Return of Capital $35.1 $86.8 $66.5 $37.4 $27.7 $19.8 $26.2 $33.6 $37.4 $19.1 $15.3 $60.6 $32.9 $8.6 Common dividend payments Share
Slide 32: Regulatory Capital
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% 11.7% 9.3% 10.1% 10.2% CET1 Tier 1 Total Risk Based Capital CET1 excluding unrealized losses* Minimum "Well Capitalized" Ratio Optimal Capital Levels 2020 2021 2022 2023 2Q24 8.0% 12.6% 12.7% 12.1% 13.0%
Slide 33: Net Interest Income Trend
Net Interest Income Trend $ In Millions $270.0 $360.2 $473.9 $562.6 $278.3 3.56% 3.41% 3.89% 4.43% 4.16% 0.36% 0.08% 1.68% 5.03% 5.33% Net Interest Income Net Interest Margin Avg Federal Funds Rate 2020 2021 2022 2023 2Q24 YTD 2020 2021 2022 2023 2Q24 YTD Net Interest Income - FTE $ 273.2 $ 365.3 $
Slide 34: Noninterest Income Trend
Noninterest Income Trend $ In Millions $54.5 $67.7 $59.2 $68.7 $27.7 $17.0 $22.1 $16.7 $22.9 $9.0 $6.6 $8.0 $2.6 $9.2 $(0.3) $11.7 $15.4 $18.3 $16.6 $9.0 $9.5 $11.9 $11.6 $10.0 $4.9 $9.7 $10.3 $10.0 $10.0 $5.1 16.8% 15.8% 11.1% 10.9% 9.0% Other Tax Credit Income Deposit Services Charge Card Services
Slide 35: Noninterest Expense Trend
Noninterest Expense Trend $167.2 $245.9 $274.2 $348.2 $187.5 $57.2 $65.0 $78.5 $94.8 $47.2 $14.2 $31.1 $72.3 $42.0$13.5 $16.3 $17.6 $16.5 $8.5 $92.3 $124.9 $147.0 $164.6 $89.8 $4.2 $22.1 $3.4 48.7% 49.7% 49.8% 53.4% 59.1% Other Deposit costs Occupancy Employee compensation and benefits Merger-relate
Slide 36: Appendix
Zz ENTERPRISE inancial Services Corp \ Appendix
Slide 37: ESG Highlights
■ Selected by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury to receive $303 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 com
Slide 38: Best-In-Class Technology Partnerships
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) TARGET
Slide 39: Executive Leadership Team
Executive Leadership Team JAMES B. LALLY 56, President & Chief Executive Officer, EFSC Enterprise Tenure – 20 years KEENE S. TURNER 44, SEVP, Chief Financial Officer, EFSC Enterprise Tenure – 10 years SCOTT R. GOODMAN 60, SEVP, President, Enterprise Bank & Trust Enterprise Tenure – 21 years DOUGLAS
Slide 40: 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 additional financial measures, such as tangible com
Slide 41: Reconciliation of Non-GAAP Financial Measures: Tangible Common Equity Ratio
Reconciliation of Non-GAAP Financial Measures Tangible Common Equity Ratio Period end (in thousands, except per share data) June 30, 2024 March 31, 2024 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Shareholders' equity (GAAP) $ 1,755,273 $ 1,731,725 $ 1,716,068 $ 1,522,263
Slide 42: Reconciliation of Non-GAAP Financial Measures: ROAA and Allowance Coverage
Quarter ended Year-to-date Year ended ($ in thousands) June 30, 2024 March 31, 2024 June 30, 2024 December 31, 2023 Net income (GAAP) $ 45,446 $ 40,401 $ 85,847 $ 194,059 FDIC special assessment (after tax) — 470 470 1,814 Core conversion expense (after tax) 940 263 1,203 — Net income adjusted (non-
Slide 43: Reconciliation of Non-GAAP Financial Measures: Core Revenue and Efficiency
Year-to-date Year ended ($ in thousands) June 30, 2024 December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Net interest income (GAAP) $ 278,257 $ 562,592 $ 473,903 $ 360,194 $ 270,001 Tax-equivalent adjustment 4,087 8,079 7,042 5,151 3,190 Less incremental accretion income — — —
Slide 44: Reconciliation: Return on Average Tangible Common Equity
Quarter ended Year-to-date ($ in thousands) June 30, 2024 March 31, 2024 June 30, 2024 Average shareholder’s equity (GAAP) $ 1,748,240 $ 1,738,698 $ 1,743,469 Less average preferred stock 71,988 71,988 71,988 Less average goodwill 365,164 365,164 365,164 Less average intangible assets 10,783 11,770
Slide 45: PPNR & PPNR ROAA Reconciliation
Quarter ended ($ in thousands) June 30, 2024 March 31, 2024 Net interest income $ 140,529 $ 137,728 Noninterest income 15,494 12,158 FDIC special assessment — 625 Core conversion expense 1,250 350 Less gain (loss) on sale of other real estate owned — (2) Less noninterest expense 94,017 93,501 PPNR (
Slide 46: Enterprise Financial Services Corp
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