Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q3 2022 Earnings Presentation
27 slides from Enterprise Financial Services's earnings presentation, Oct 24, 2022
Slide 1: Enterprise Financial Services Corp 2022 Third Quarter Earnings Webcast
Enterprise Financial Services Corp 2022 Third 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 - 3Q22
Financial Highlights - 3Q22* Capital • Tangible Common Equity/Tangible Assets** 7.86%, compared to 7.80% • Tangible Book Value Per Share $26.62, compared to $26.63 • CET1 Ratio 11.0%, compared to 10.9% • Accumulated other comprehensive income declined $44.7 million primarily from a decrease in the f
Slide 4: Financial Highlights, continued - 3Q22
Financial Highlights, continued - 3Q22* *Comparisons noted below are to the linked quarter unless otherwise noted. Loans & Deposits • Loans $9.4 billion, up $85.8 million • PPP Loans, $13.2 million, net of deferred fees, down $36.0 million • Loan/Deposit Ratio 85% • Deposits $11.1 billion, down $35
Slide 5: 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 5
Slide 6: Total Loan Trends
$9,117 $9,018 $9,056 $9,269 $9,355 3Q21 4Q21 1Q22 2Q22 3Q22 In Millions 8% Total Loan Growth* *Excluding PPP **Excludes First Choice PPP loans of $206 million included in acquisition total. First Choice $1,944 Total Loan Trends PPP** $233 PPP $134 PPP $272 PPP $13 PPP $49 6
Slide 7: Loan Details - LTM 3Q22
Loan Details - LTM 3Q22 3Q21 LTM Change C&I $ 1,843 $ 1,458 $ 385 CRE Investor Owned 2,106 1,935 171 CRE Owner Occupied 1,133 1,163 (30) SBA loans* 1,269 1,200 69 Sponsor Finance* 650 455 195 Life Insurance Premium Financing* 718 573 145 Tax Credits* 508 462 46 Residential Real Estate 382 520 (138)
Slide 8: Loan Details - QTR 3Q22
Loan Details - QTR 3Q22 2Q22 QTR Change C&I $ 1,843 $ 1,702 $ 141 CRE Investor Owned 2,106 1,978 128 CRE Owner Occupied 1,133 1,119 14 SBA loans* 1,269 1,284 (15) Sponsor Finance* 650 647 3 Life Insurance Premium Financing* 718 688 30 Tax Credits* 508 551 (43) Residential Real Estate 382 392 (10) Co
Slide 9: Total Loans By Region
Total Loans By Region Specialty Lending $2,611 $3,133 $3,179 3Q21 2Q22 3Q22 In Millions Midwest $2,908 $3,031 $3,115 3Q21 2Q22 3Q22 Southwest $1,100 $1,146 $1,161 3Q21 2Q22 3Q22 Note: Excludes PPP and Other loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX
Slide 10: Deposit Details - LTM 3Q22
Deposit Details - LTM 3Q22 3Q21 LTM Change Noninterest-bearing demand accounts $ 4,643 $ 4,376 $ 267 Interest-bearing demand accounts 2,271 2,254 17 Money market accounts 2,793 2,822 (29) Savings accounts 824 749 75 Certificates of deposit: Brokered 129 129 — Other 398 498 (100) Total deposits $ 11,
Slide 11: Deposit Details - QTR 3Q22
Deposit Details - QTR 3Q22 2Q22 QTR Change Noninterest-bearing demand accounts $ 4,643 $ 4,747 $ (104) Interest-bearing demand accounts 2,271 2,198 73 Money market accounts 2,793 2,726 67 Savings accounts 824 837 (13) Certificates of deposit: Brokered 129 129 — Other 398 456 (58) Total Deposits $ 11
Slide 12: Total Deposits By Region
Total Deposits By Region Specialty Deposits $1,912 $2,403 $2,422 3Q21 2Q22 3Q22 In Millions Midwest $5,268 $5,328 $5,221 3Q21 2Q22 3Q22 Southwest $1,701 $1,820 $1,827 3Q21 2Q22 3Q22 West $1,947 $1,542 $1,588 3Q21 2Q22 3Q22 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM
Slide 13: Specialty Deposits
Specialty Deposits 40.0% 23.0% 12.9% 2.3% 21.8% Community Associations $969 million in deposit accounts specifically designed to serve the needs of community associations. Property Management $556 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party
Slide 14: Earnings Per Share Trend - 3Q22
Earnings Per Share Trend - 3Q22 $1.19 $0.20 $(0.07) $1.32 2Q22 Operating Revenue Noninterest Expense 3Q22 Change in EPS 14
Slide 15: Net Interest Income Trend
$97.3 $102.1 $101.2 $109.6 $124.3 3.40% 3.32% 3.28% 3.55% 4.10% 0.09% 0.08% 0.12% 0.76% 2.20% Net Interest Income PPP Income Net Interest Margin Avg Fed Funds Rate 3Q21* 4Q21 1Q22 2Q22 3Q22 Net Interest Income Trend In Millions 27.7% NII Growth PPP Income $2.9 PPP Income $1.6 PPP Income $0.5 PPP Inc
Slide 16: Net Interest Margin
Net Interest Margin 4.32% 4.32% 4.34% 4.51% 5.10% 2.38% 2.30% 2.31% 2.51% 2.65% 0.15% 0.15% 0.19% 0.71% 2.17% 3.60% 3.50% 3.45% 3.76% 4.47% Earning asset yield Interest-earning deposit yield Securities yield Loan yield 3Q21 4Q21 1Q22 2Q22 3Q22 0.17% 0.17% 0.17% 0.24% 0.54% 0.11% 0.10% 0.10% 0.13% 0.
Slide 17: Credit Trends for Loans
Credit Trends for Loans 8 14 7 (1) 2 3Q21 4Q21 1Q22 2Q22 3Q22 $111 $68 $176 $298 $122 $(164) $(167) $(138) $(85) $(36) 38.2% 39.9% 39.9% 43.9% 42.5% Organic Loans PPP Loans Avg Line Draw % 3Q21 4Q21 1Q22 2Q22 3Q22 3Q22 2Q22 3Q21 NPLs/Loans 0.19% 0.21% 0.46% NPAs/Assets 0.14% 0.16% 0.35% ACL/NPLs 773
Slide 18: Allowance for Credit Losses for Loans
$140.5 $0.5 $(0.5) $140.5 ACL 2Q22 Portfolio Changes Net Charge-offs ACL 3Q22 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 macroeconomic
Slide 19: Noninterest Income Trend
Noninterest Income Trend Other Fee Income DetailFee Income In Millions $9.5 $17.6 $22.6 $18.6 $14.2 $2.6 $2.7 $2.6 $2.5 $2.4 $4.5 $3.9 $4.2 $4.8 $5.0 $3.2 $3.2 $3.0 $3.5 $2.7 $4.0 $8.4 $6.2 $2.2 $3.0 $3.3 $4.4 $2.6 $1.2 $(3.6) 15.3% 18.1% 15.6% 11.5% 7.1% Wealth Management Deposit Services Charge Ca
Slide 20: Operating Expenses Trend
Operating Expenses Trend Other Operating Expenses DetailOperating Expenses In Millions $76.9 $63.7 $62.8 $65.4 $68.8 $20.6 $23.4 $22.4 $25.1 $27.3 $4.5 $4.5 $4.6 $4.3 $4.5 $33.7 $33.5 $35.8 $36.0 $37.0 $14.7 $2.3 $3.4 51.3% 49.2% 52.4% 52.8% 51.5% Other Occupancy Employee compensation and benefits M
Slide 21: Capital
Capital Tangible Common Equity/Tangible Assets* 8.40% 8.13% 7.62% 7.80% 7.86% Tangible Common Equity/Tangible Assets 3Q21 4Q21 1Q22 2Q22 3Q22 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. Regulatory Capital 10.0% 14.5% 14.7% 14.4% 14.2% 14.2% 6.5% 11.2% 11.3% 11.0% 10.9% 11.0% CET1 Tier
Slide 22: Appendix
Appendix Third Quarter 2022 Earnings Webcast
Slide 23: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,446,218 $ 1,447,412 $ 1,473,177 $ 1,529,116 $ 1,43
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 CALCULATION OF PRE-PROVISION NET REVENUE Net interest income $ 124,290 $ 109,613 $ 101,165 $ 102,060 $ 97,273 Noninterest income 9,454 14,194 18,641 22,630 17
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 CORE PERFORMANCE MEASURES Net interest income $ 124,290 $ 109,613 $ 101,165 $ 102,060 $ 97,273 Noninterest income 9,454 14,194 18,641 22,630 17,619 Less gain
Slide 27: Q & A
Q & A Third Quarter 2022 Earnings Webcast
Enterprise Financial Services — Q3 2022 Earnings Presentation on 6ix