Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q2 2020 Earnings Presentation
32 slides from Enterprise Financial Services's earnings presentation, Jul 20, 2020
Slide 1: Enterprise Financial Services Corp 2020 Second Quarter Earnings Webcast
Exhibit 99.2 Enterprise Financial Services Corp 2020 Second 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. EARLY MAR. APRIL EARLY JUNE JULY Discussions begin Measures including SBA Paycheck Protection Facilities readiness Internal dashboard about virus; COVID‐ restricted travel to Program launched; determined for eventual tr
Slide 4: 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 3,798 applications (and climbing) from small business owners Our Focus $808 million in loans outstanding with an average
Slide 5: Total Loan Trends
Total Loan Trends 19% Total Loan Growth In Millions $6,140 PPP $5,458 $808 $5,314 $5,149 $5,228 Q2' 19 Q3' 19 Q4' 19 Q1' 20 Q2' 20 5
Slide 6: Commercial & Industrial Loan Trends
Commercial & Industrial Loan Trends In Millions 39% C&I Growth $3,143 PPP $808 $2,469 $2,361 $2,265 $2,303 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 6
Slide 7: Loan Details
Loan Details Q2 ’20 Q1 ’20 QTR Q2 ’19 LTM In Millions Change Change C&I - General $ 1,058 $ 1,186 $ (128) $ 1,104 $ (46) CRE, Investor Owned - General 1,301 1,319 (18) 1,235 66 CRE, Owner Occupied - General 600 585 15 591 9 SBA PPP loans 808 — 808 — 808 Enterprise Value Lending1 383 441 (58) 446 (63
Slide 8: Total Loans By Business Unit
Total Loans By Business Unit In Millions Specialized Lending St.Louis Kansas City $991 $1,039 $990 $783 $832 $824 $2,339 $2,568 $2,506 Q2 '19 Q1 '20 Q2 '20 Q2 '19 Q1 '20 Q2 '20 Q2 '19 Q1 '20 Q2 '20 Arizona New Mexico $678 $636 $625 $358 $383 $387 Q2 '19 Q1 '20 Q2 '20 Q2 '19 Q1 '20 Q2 '20 Note: Q2 '2
Slide 9: Deposit Trend
Deposit Trend 29.3% 21.3% 23.0% 23.0% 22.6% $6,700 In Millions $5,990 $5,771 $5,559 $5,624 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Deposits Noninterest-bearing % u Last Twelve Months Growth Rate = 21% 9
Slide 10: Loan Portfolio
Loan Portfolio Loans by Product Type Loans by Industry Type Other Services Construction 7.4% 31.2% Residential 5.3% Accommodation Real Estate/ Other 2.2% & Food Service CRE 31.0% 5.7% Rental/Leasing 25.7% EVL 6.2% Construction 5.9% LIPF 8.5% Other Services 6.4% Finance and Tax Credit 5.9% Manufactur
Slide 11: 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 Finance and Accommodation, Other Insurance Food Service 27.5% 29.5% 10.0% Real Estate/ Total Total Health Care, Rental/Leasing Social Assistance Retail Trade 77.1% 5.0% $3.1 Billion $1.3 Billion 5.7
Slide 12: Loan Modifications
Loan Modifications Loan Modifications In Millions Loan Modifications by Loan Type Q2 ’20 Interest deferred $4.0 Residential Loans with modifications: 3.1% CRE 59.0% Commercial Real Estate $404.3 Commercial and Industrial 171.1 Construction Construction Real Estate 88.4 12.9% Residential Real Estate
Slide 13: Enterprise Value Lending (EVL)
Enterprise Value Lending (EVL) Total $383 Million EVL Loans by Industry EVL Loans by Location Southeast Other Manufacturing 20.0% 16.6% 35.0% Midwest 36.0% West Health Care 9.2% 3.8% Professional Arts & Technical Entertainment 16.1% Northeast 4.6% Southwest 20.6% Administrative & Wholesale 14.2% Sup
Slide 14: PPP Loans
PPP Loans Total $808 Million PPP Loans by Industry PPP Loans by Location Other Construction 17.9% Southeast 27.9% 3.6% Midwest 68.8% West 3.8% Manufacturing Administrative 16.7% Northeast Support 2.3% 6.8% Retail Trade 7.4% Professional Southwest Services 21.5% Health Care 8.5% 14.8% 3,798 applica
Slide 15: Hospitality Loans
Hospitality Loans Total $375 Million Hospitality Loans by Product Type Hospitality Loans by Subsector Commercial Real Estate Hotels and 52.8% Campgrounds C&I 58.7% 13.7% Tax Credits 3.7% EVL 4.7% Food and Drink Services Amusement and Construction 20.2% Recreation 25.1% 21.1% Hospitality Loans by Siz
Slide 16: Earnings Per Share Trend - Q2 2020
Earnings Per Share Trend - Q2 2020 Change in EPS $0.08 $0.09 $0.03 $(0.02) $(0.10) $0.56 $0.48 Q1 '20 Net Interest Incremental Provision for Noninterest Noninterest Q2 '20 Income Accretion Credit Losses Income Expense 16
Slide 17: Net Interest Income Trend
Net Interest Income Trend 3.86% 3.81% 3.79% 3.68% 3.53% In Millions $65.8 $63.0 $63.4 $61.7 $61.6 7% NII Growth Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 17
Slide 18: Credit Trends for Loans
Credit Trends for Loans Net Charge-offs (annualized) Total Loan Growth In Millions 55.3% 44.3% 46.2% 47.3% 42.6% $683 8 bps 19 bps 9 bps 2 bps $132 $143 8bps $79 $86 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Growth Line Draw % Provision for Credit Losses In Millions EFSC
Slide 19: Noninterest Income Trend
Noninterest Income Trend In Millions Fee Income Other Fee Income Detail $14.4 $4.0 $13.6 $13.4 $3.6 $1.2 $3.4 $12.0 $2.0 $1.0 $0.2 $0.6 $0.2 $3.0 $4.0 $10.0 $2.9 $2.9 $0.2 $2.7 $2.7 $3.6 $0.5 $0.4 $0.2 $1.1 $0.2 $0.4 $2.8 $0.2 $0.2 $2.4 $2.5 $2.4 $0.2 $2.2 $0.4 $0.5 $2.2 $0.8 $3.4 $3.2 $3.3 $3.1 $2.
Slide 20: Operating Expenses Trend
Operating Expenses Trend 53.3% 51.7% 50.7% 51.2% 50.7% In Millions $49.1 $10.3 $38.2 $38.4 $38.7 $37.9 $0.4 $20.7 $20.4 $21.7 $20.8 $22.4 $3.2 $3.2 $3.5 $3.3 $3.2 $14.9 $13.8 $14.5 $13.7 $12.3 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Other Occupancy Employee compensation and benefits Merger-related expens
Slide 21: Capital
Capital Tangible Common Equity/Tangible Assets* Q2 YTD 2020 Holding Company Capital Uses (Annualized) In Thousands $19,020 8.89% $15,073 8.43% 8.54% 8.42% 8.67% Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Debt Service Dividends Regulatory Capital 14.40% 12.62% 12.72% 12.90% 12.85% 10.00% 11.06% 11.17% 11.40%
Slide 22: Appendix
Second Quarter 2020 Earnings Webcast Appendix
Slide 23: 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 24: Earnings Per Share Trend - 2020
Earnings Per Share Trend - 2020 Change in EPS $0.48 $0.55 $(0.03) $0.07 $1.36 $(1.22) $1.04 $(0.17) Q2 '19 YTD Net Interest Provision for Noninterest Noninterest Merger-Related Change in/ Q2 '20 YTD Income Credit Losses Income Expense Expense Shares ETR 24
Slide 25: Energy-Related Loans
Energy-Related Loans Total $134 Million Energy‐Related Loans by Product Type Energy‐Related Loans by Subsector Professional 1.4% Aircraft C&I 3.5% 52.7% Other Manufacturing 9.2% 40.7% EVL 10.2% Utilities Residential/ 10.0% Consumer 0.4% Wholesale Trade 9.7% Retail Trade Transportation/ CRE 26.7% Con
Slide 26: Agricultural Lending
Agricultural Lending Total $191 Million Agricultural Lending by Product Type Agricultural Lending by Subsector Hog & Pig Other Farming 9.5% 32.8% C&I 28.3% CRE ‐ Owner Occupied Misc Crop 8.4% 71.7% Corn Farming Soybean 22.2% Farming 5.2% Dairy Cattle Beef Cattle 5.3% 16.6% Agricultural Loans by Size
Slide 27: Aircraft and Owner-Occupied Auto Dealer Lending/Loans
Aircraft and Owner-Occupied Auto Dealer Lending/Loans Total $157 Million Aircraft & OO‐Auto Dealer Lending by Aircraft & OO‐Auto Dealer Lending by Product Type Subsector Aircraft Finance Other C&I 49.5% 7.9% 0.3% Educational Residential Services 3.9% 2.2% Retail Trade Manufacturing 78.2% 4.7% CRE‐Ow
Slide 28: Loans Secured by Marketable Securities
Loans Secured by Marketable Securities Total $620 Million Loans Secured by Marketable Loans secured by Marketable Securities by Securities by Product Type Subsector Other 9.0% Agricultural 1.2% Management Finance & C&I 6.3% Insurance 9.1% 84.7% Other Life Insurance 5.9% Premium Finance 83.8% Loans S
Slide 29: Retail Commercial Real Estate
Retail Commercial Real Estate Total $354 Million Retail CRE Loans by Location Retail CRE Loans by Subsector Other 1.7% Midwest 50.5% Accomodation/ Food Service Southwest 2.7% 30.1% Real Northeast Estate/Rental/ 3.4% Leasing Southeast West 95.6% 1.9% 14.1% Retail CRE Loans by Size $ In Millions 95%
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Six months ended Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30, ($ in thousands) 2020 2020 2019 2019 2019 2020 2019 CORE PERFORMANCE MEASURES Net interest income $ 65,833 $ 63,368 $ 61,613 $ 63,046 $ 61,715 $ 129,201 $ 114,058 Less
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, ($ in thousands) 2020 2020 2019 2019 2019 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 867,963 $ 846,436 $ 867,185 $ 846,095 $ 825,501 Less
Slide 32: Q & A
Second Quarter 2020 Earnings Webcast Q & A
Enterprise Financial Services — Q2 2020 Earnings Presentation on 6ix