Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q1 2022 Earnings Presentation
39 slides from Enterprise Financial Services's earnings presentation, May 24, 2022
Slide 1: First Quarter 2022 Investor Presentation
Enterprise Financial Services Corp First Quarter 2022 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: Company Highlights
Enterprise Financial Services Corp Guiding People to a Lifetime of Financial Success Company Highlights 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. Target Market P
Slide 4: Key Metrics
Key Metrics Credit Profitability Balance Sheet Peer Banks $10-50B Median Top Quartile 1Q22 FY2021 Return on average tangible common equity(1) 17.49 % 18.29 % 15.48 % 16.96 % Net interest margin 3.28 % 3.41 % 2.98 % 3.18 % Efficiency ratio(1) 52.43 % 51.61 % 56.30 % 49.52 % Tangible common equity/tan
Slide 5: Executive Leadership Team
Executive Leadership Team JAMES B. LALLY 54, President & Chief Executive Officer, EFSC Enterprise Tenure – 18 years KEENE S. TURNER 42, EVP, Chief Financial Officer, EFSC Enterprise Tenure – 8 years SCOTT R. GOODMAN 58, President, Enterprise Bank & Trust Enterprise Tenure – 19 years DOUGLAS N. BAUCH
Slide 6: Company Snapshot - EFSC
Company Snapshot - EFSC Total Assets $13.7 Billion Market Cap Operates in St. Louis Kansas City Phoenix $1.8 Billion • Proven Ability to Grow Commercial & Industrial “C&I” Loans • Product Breadth ◦ Commercial and Specialty Lending ◦ SBA ◦ Specialty Deposits ◦ Card Services ◦ Treasury Management • Re
Slide 7: Differentiated Business Model
Differentiated Business Model: Provides Multiple Channels to Drive Growth and Earnings Focused and Well-Defined Strategy Aimed at Business Owners, Executives and Professionals. Targeted Array of Banking and Wealth Management Services to Meet our Client’s Needs Experienced Bankers and Advisors Commun
Slide 8: Diversified Revenue
Diversified Revenue (2021 financial data) Treasury Management $1.9B in Assets Under Management Tax Credit Services Mortgage Banking Community Development Other Services St. Louis Kansas City Southwest Region New Mexico Southern California Specialty Lending Net Interest Income Noninterest Income St.
Slide 9: Regional and National Markets
Regional and National Markets 1 Source: 6/30/21 data for market rank and market share; S&P Global Market Intelligence. Loans* Deposits St. Louis California New Mexico Kansas City Arizona Specialty MSA Branches Deposit Market Rank1 Deposit Market Share1 St. Louis, MO-IL 19 5 4.3% San Diego-Chula Vist
Slide 10: Focused Loan Growth Strategies
Focused Loan Growth Strategies Total Loans Specialty market segments represent 34% of total loans, offering competitive advantages, risk adjusted pricing and fee income opportunities. Tax Credit Programs $518 million in loans outstanding related to Federal, Historic, and Missouri Affordable Housing
Slide 11: Total Loan Trends
Total Loan Trends Loans PPP Loans/Deposits In Millions PPP $272 PPP $699 PPP $134 11
Slide 12: Drivers of Loan Growth - Year over Year
Drivers of Loan Growth - Year over Year 56% 26% 91% 1Q21 - 1Q22 Increase of $1.8 Billion -34% 6% 2% 5%7% 18%14% CRE C&I SBA PPP LIPFTax CreditsOther RRE Sponsor Finance 12
Slide 13: Loan Portfolio
Loan Portfolio Total $9.0 Billion Loans by Product Type Loans by Industry Type Loans by Rate Type $ In Billions Loan Floors by Category Balance Priced below floor: 0-25bp $0.2 25-50bp 0.5 50-75bp 0.3 75-100bp 0.4 >100bp 0.5 Priced at floor 0.8 Priced above floor 0.6 Total $3.3 13
Slide 14: Loan Details - QTR
Loan Details - QTR 1Q22 4Q21 QTR Change C&I $ 1,498 $ 1,538 $ (40) CRE, Investor Owned 1,983 1,955 28 CRE, Owner Occupied 1,138 1,113 25 SBA loans*1 1,250 1,241 9 Sponsor Finance* 641 508 133 Life Insurance Premium Financing* 636 594 42 Tax Credits* 518 487 31 Residential Real Estate 410 431 (21) Co
Slide 15: Loan Details - LTM
Loan Details - LTM 1Q22 1Q21 LTM Change First Choice Net Organic Change C&I $ 1,498 $ 1,049 $ 449 $ 269 $ 180 CRE, Investor Owned 1,983 1,491 492 568 (76) CRE, Owner Occupied 1,138 806 332 278 54 SBA loans*1 1,250 941 309 158 151 Sponsor Finance* 641 394 247 — 247 Life Insurance Premium Financing* 6
Slide 16: Total Loans By Business Unit
Total Loans By Business Unit In Millions Note: Excludes PPP and Other loans **4Q21 and 1Q22 include First Choice acquisition *4Q21 and 1Q22 include acquired First Choice SBA loans 16
Slide 17: Deposit Mix
Deposit Mix CD Interest-Bearing Transaction Accounts DDA MMA & Savings• Cost of deposits 10 bps* In Millions Total Deposits $11.7 Billion *MRQ 17
Slide 18: Specialty Deposits
Specialty Deposits Community Associations $767 million in deposit accounts specifically designed to serve the needs of community associations. Property Management $480 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party Escrow $587 million in deposi
Slide 19: Core Funding Mix
Core Funding Mix Commercial Business Banking Consumer In Millions $3,244 29% $2,769 34% $1,347 12% $1,089 13% $3,993 36% $2,971 37% Cost of Funds1 Commercial Business Banking Consumer Specialty Brokered Core 0.06% 0.02% 0.08% 0.09% Time Deposit 0.43% 0.91% 0.45% 0.33% Total 0.10% 0.04% 0.08% 0.09% 0
Slide 20: Earnings Per Share Trend - 1Q22
Earnings Per Share Trend - 1Q22 Change in EPS 20
Slide 21: Net Interest Income Trend
Net Interest Income Trend In Millions Net Interest Income Net Interest Margin 2017 2018 2019 2020 2021 1Q22 21
Slide 22: Credit Trends for Loans
Credit Trends for Loans 2017 2018 2019 2020 2021 1Q22 NPAs/Assets 0.31% 0.30% 0.45% 0.45% 0.23% 0.17% NPLs/Loans 0.38% 0.38% 0.50% 0.53% 0.31% 0.23% ACL/NPLs 243.3% 259.6% 163.8% 354.9% 517.6% 657.9% ACL/Loans* 1.04% 1.00% 0.81% 2.31% 1.84% 1.73% Provision expense (benefit) $ 10.1 $ 6.6 $ 6.4 $ 65.4
Slide 23: Allowance for Credit Losses for Loans
Allowance for Credit Losses for Loans In Thousands • 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 and qualitative factors 1Q22 Loans ACL ACL as a % of Loans Commercial and ind
Slide 24: Noninterest Income Trend
Noninterest Income Trend In Millions 24
Slide 25: Operating Expenses Trend
Operating Expenses Trend In Millions 25
Slide 26: Capital Strategy
Capital Strategy EFSC Capital Strategy: Low Cost - Highly Flexible High Capital Retention Rate Supporting 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
Slide 27: Capital: Dividend Payments and Share Repurchases
Capital Dividend payments Share repurchases In Millions 27
Slide 28: Regulatory Capital
Regulatory Capital 8.0% 12.7%13.0% 10.3% 11.4% 12.1% 11.1% 12.0% 28
Slide 29: Balance Sheet Positioned for Growth
Modest Asset Sensitivity (50bp increase in interest rate increases NII 3-4%) 63% Adjustable Rate Loans High-quality, Cash-flowing Securities Portfolio with Six-Year Average Duration 41.7% Non- Interest Bearing DDA to Total Deposits 7.70% Tangible Common Equity/Tangible Assets* Balance Sheet Position
Slide 30: Appendix First Quarter 2022
Appendix First Quarter 2022 EFSC Investor Presentation
Slide 31: Financial Highlights - 1Q22
• Net Income $47.7 million; EPS $1.23 • PPNR* $57.0 million • ROAA 1.42%; PPNR ROAA* 1.70% • ROATCE* 17.49% Earnings Financial Highlights - 1Q22 Capital • Tangible Common Equity/Tangible Assets* 7.62%; Adjusted for PPP* 7.70% • Accumulated other comprehensive income declined $78.0 million primarily
Slide 32: ESG Highlights
■ Selected in 2021 by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury to receive a $60 million allocation of New Markets Tax Credits. ■ In 2021 we invested over $1.6 billion in programs designed to promote small business and community developm
Slide 33: 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 34: Calculation of Adjusted ROATCE
Quarter ended Year ended (in thousands, except per share data) March 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Net income available to common shareholders - GAAP $ 46,464 $ 133,055 $ 74,384 $ 92,739 Branch-closure expenses — 3,441 — — CECL double count — 25,353 8,557 — Merger-re
Slide 35: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended (in thousands) March 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 Net interest income $ 101,165 $ 360,194 $ 270,001 $ 238,717 $ 191,905 $ 177,304 Less incremental accretion in
Slide 36: Reconciliation of Non-GAAP Financial Measures: Tangible Common Equity
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended (in thousands) March 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Shareholders' equity $ 1,473,177 $ 1,529,116 $ 1,078,975 $ 867,185 Less preferred stock 71,988 71,988 — — Less goodwill 365,164 365,164 260,567 2
Slide 37: Pre-Provision Net Revenue Return on Average Assets
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended (in thousands) March 31, 2022 December 31, 2021 Net interest income $ 101,165 $ 360,194 Noninterest income 18,641 67,743 Noninterest expense (62,800) (245,919) Branch-closure expenses — 3,441 Merger-related expenses — 22,082 PPNR
Slide 38: Tangible Book Value per Share
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended ($ in thousands, except per share data) March 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 Shareholders' equity $ 1,473,177 $ 1,529,116 $ 1,078,975 $ 867,185 $ 603,804 $ 548,5
Slide 39: Q&A First Quarter 2022
Q&A First Quarter 2022 EFSC Investor Presentation For more information contact Keene Turner, Executive Vice President and CFO (314) 512-7233
Enterprise Financial Services — Q1 2022 Earnings Presentation on 6ix