Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Shareholder Meeting (May 2016)
37 slides from Enterprise Financial Services's shareholder meeting presentation, May 5, 2016
Slide 1: Enterprise Financial Services Corp Annual Shareholder Meeting – May 5, 2016
Enterprise Financial Services Corp ANNUAL SHAREHOLDER MEETING – MAY 5, 2016
Slide 2: James J. Murphy, Jr., Chairman, EFSC
1 JAMES J. MURPHY, JR. CHAIRMAN, EFSC 2016 ANNUAL SHAREHOLDER MEETING
Slide 3: Birch M. Mullins: Thank You for Your Service and Many Contributions
2 BIRCH M. MULLINS THANK YOU FOR YOUR SERVICE AND MANY CONTRIBUTIONS 1996-2016
Slide 4: Welcome to the EFSC Board of Directors: Michael R. Holmes
3 WELCOME TO THE EFSC BOARD OF DIRECTORS MICHAEL R. HOLMES
Slide 5: John S. Eulich, Chairman Elect, EFSC
4 JOHN S. EULICH CHAIRMAN ELECT, EFSC 2016 ANNUAL SHAREHOLDER MEETING
Slide 6: James J. Murphy, Jr.: Thank You for Your Service as Chairman
5 JAMES J. MURPHY, JR. THANK YOU FOR YOUR SERVICE AS CHAIRMAN OF THE BOARD 2008-2016
Slide 7: Keene S. Turner, Chief Financial Officer, EFSC
6 KEENE S. TURNER CHIEF FINANCIAL OFFICER, EFSC 2016 ANNUAL SHAREHOLDER MEETING
Slide 8: 2015 Highlights
7 Reported Core* Record Earnings Per Share $ 1.89 $ 1.66 Growth of Earnings Per Share 40% 29% Return on Assets 1.14% 1.00% Efficiency Ratio 58% 58% 2015 HIGHLIGHTS Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
Slide 9: Full Year Earnings Per Share Trend
8 FULL YEAR EARNINGS PER SHARE TREND $1.29 $0.29 < $0.01> $0.03 $0.06 $1.66 2014 YTD Net Interest Income Portfolio Loan Loss Provision Non Interest Income Non Interest Expense 2015 YTD In Millions CHANGES IN CORE EPS* Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
Slide 10: Positive Momentum in Core Earnings Per Share
9 POSITIVE MOMENTUM IN CORE* EARNINGS PER SHARE $0.28 $0.31 $0.37 $0.33 $0.35 $0.38 $0.44 $0.49 $0.47 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation 68% Core EPS Growth from Q1 2014 to Q1 2016 Two-year CAGR – 30%
Slide 11: Core Net Interest Income Trends
10 CORE NET INTEREST INCOME TRENDS* In Millions Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation $25.6 $26.3 $27.1 $28.7 $29.6 3.46% 3.46% 3.41% 3.50% 3.54% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $18.0 $19.0 $20.0 $21.0 $22.0 $23.0 $24.0 $25.0 $26.0 $27.0 $28.0 $29.0 $30.0 Q
Slide 12: Credit Trends for Portfolio Loans
11 CREDIT TRENDS FOR PORTFOLIO LOANS 25 bps 11 bps 2 bps -10 bps -1 bps Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Net Charge-offs (1) (1) Portfolio loans only, excludes PCI (Purchased Credit Impaired) loans $1.6 $2.2 $0.6 $0.5 $0.8 $- $0.6 $1.2 $1.8 $2.4 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Provision for Por
Slide 13: Operating Expenses Trends
12 OPERATING EXPENSES TRENDS* In Millions Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation $5.9 $6.1 $6.2 $6.5 $6.1 $1.7 $1.6 $1.6 $1.7 $1.7 $11.5 $11.3 $11.5 $11.8 $12.6 60.7% 57.6% 58.6% 56.1% 57.4% 0 5 10 15 20 25 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Other Occupancy Employee compens
Slide 14: Scott R. Goodman, President, Enterprise Bank & Trust
13 SCOTT R. GOODMAN PRESIDENT, ENTERPRISE BANK & TRUST 2016 ANNUAL SHAREHOLDER MEETING
Slide 15: Growing Opportunities for Regional Banks Like Enterprise
14 GROWING OPPORTUNITIES FOR REGIONAL BANKS LIKE ENTERPRISE Universal Banks Assets / Total Financial Sector Assets (1) Source: Board of Governors of the Federal Reserve System, SNL Financial and KBW Research Universal Banks include: BAC, BK, C, GS, JPM, MS, STT and WFC (1) Measures the sum of univer
Slide 16: Executing a Successful Growth Strategy
15 GAINING SHARE IN CORE MARKETS Superior Business Model Efficient, Branch-Light Structure Record of Attracting Top Talent Culture Driving Excellent Client Satisfaction EXECUTING A SUCCESSFUL GROWTH STRATEGY EXPANDING REACH IN SPECIALIZED MARKETS Capitalizing on Special Expertise Command
Slide 17: Strong Portfolio Loan Trends
16 STRONG PORTFOLIO LOAN TRENDS $2,436 $2,543 $2,602 $2,751 $2,833 3/31/2015 6/30/2015 9/30/2015 12/31/2015 3/31/2016 In Millions
Slide 18: Portfolio Loans Growing in Each Region
17 PORTFOLIO LOANS GROWING IN EACH REGION $1,335 $1,387 $1,427 $1,100 $1,150 $1,200 $1,250 $1,300 $1,350 $1,400 $1,450 3/31/2015 12/31/2015 3/31/2016 St. Louis $503 $535 $532 0 200 400 600 800 1000 1200 1400 3/31/2015 12/31/2015 3/31/2016 $139 $190 $188 0 500 1000 1500 3/31/2015 12/31/2015 3/31/2016
Slide 19: Our Model Creates Strong Client Relationships
18 OUR MODEL CREATES STRONG CLIENT RELATIONSHIPS 7% 5% 6% 23% 17% 24% 70% 78% 70% Overall Client Satisfaction RM Satisfaction Prefer Over Competitors Dissatisfied Satisfied Completely Satisfied NORM 56% NORM 73% Source: Greenwich & Associates
Slide 20: Specialized Lending Boosts Our Growth
19 SPECIALIZED LENDING BOOSTS OUR GROWTH $136 $137 $153 $229 $350 $360 $230 $265 $272 $30 3/31/2015 12/31/2015 3/31/2016 Tax Credit Enterprise Value Lending Life Insurance Premium Financing Aircraft Finance In Millions
Slide 21: Growth Potential Beyond Our Core Footprint
20 GROWTH POTENTIAL BEYOND OUR CORE FOOTPRINT Red: Core Markets Green: Specialized Lending Markets
Slide 22: Drivers of Loan Growth
21 DRIVERS OF LOAN GROWTH Enterprise Value Lending 32.9% Life Insurance Premium Finance 10.8% General Commercial & Industrial 24.1% Commercial/ Construction RE 14.8% Residential RE 5.5% Consumer & Other 11.9% $397 MILLION Mar 31, 2015 – Mar 31, 2016
Slide 23: Delivering Robust Deposit Growth
22 DELIVERING ROBUST DEPOSIT GROWTH $2,109 $2,181 $2,357 $2,428 $2,471 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Slide 24: With an Attractive Deposit Mix
23 DDA 25% MMA & Savings 39% CD 16% Interest Bearing Transaction Accounts 20% …WITH AN ATTRACTIVE DEPOSIT MIX Cost of Deposits 0.34% Mar 31, 2016 $2,932 MILLION
Slide 25: Targeted Approach to Deposit Growth
24 TARGETED APPROACH TO DEPOSIT GROWTH Identify Deposit- Rich Segments Targeted Marketing, Sales, Product Design Establish Client Focused Deposit Niches FOR EXAMPLE… FINANCIAL SERVICES FIRMS REGISTERED INVESTMENT ADVISORS LARGE CORPORATIONS
Slide 26: James B. Lally, EVP, Director of Commercial Banking
25 JAMES B. LALLY EVP, DIRECTOR OF COMMERCIAL BANKING 2016 ANNUAL SHAREHOLDER MEETING
Slide 27: Multiple Fee Income Engines
26 TREASURY MANAGEMENT INTERNATIONAL SERVICES TAX CREDIT BROKERAGE FEES FROM NEW MARKETS TAX CREDIT ALLOCATIONS WEALTH MANAGEMENT & PRIVATE BANKING MORTGAGE BANKING CARD PRODUCTS MULTIPLE FEE INCOME ENGINES
Slide 28: Producing a Diverse Revenue Mix
27 27.4% 31.0% 9.8% 2.9% 10.6% 0.1% 6.7% 1.6% 9.9% Trust Income Treasury Management, International & Service Charges Card Services Other Charges & Fees Gain on Sale of Tax Credits Gain on Other Real Estate (core) CDE Revenue Gain on Sale of Mortgages, net PRODUCING A DIVERSE REVENUE MIX… In Millions
Slide 29: And Growing Fee Income Streams
28 … AND GROWING FEE INCOME STREAMS - 5.0 10.0 15.0 20.0 25.0 2011 2012 2013 2014 2015 Trust Income Service Charges On Deposits Card Services Other Charges and Fee Gain on Sale of Tax Credits Gain on other real estate (core) CDE Revenue Gain on sale of mortgages, net Miscellaneous income
Slide 30: Fee Income Growth Strategies
29 RECRUITING TALENT DEPLOYING TECHNOLOGY Product Sales TRAINING STRATEGIC INSOURCING/OUTSOURCING CAPITALIZING ON OUR RELATIONSHIP-FOCUSED CULTURE FEE INCOME GROWTH STRATEGIES
Slide 31: Peter F. Benoist, President & CEO, EFSC
30 PETER F. BENOIST PRESIDENT & CEO, EFSC 2016 ANNUAL SHAREHOLDER MEETING
Slide 32: Sustained Growth in Earnings and Returns
31 SUSTAINED GROWTH IN Earnings AND Returns 45% 2015 TOTAL SHAREHOLDER RETURN NEARLY 4 times SNL Index FIVE CONSECUTIVE QUARTERLY Dividend Increases $0.10 Q2 2016 190% 91% 81% EFSC SNL S&P 5-Year Total Shareholder Return Note: SNL Index = U.S. Bank $1B - $5B, as of 12/31/2015 Source: SNL ENTERPR
Slide 33: Q & A
32 Q & A 2016 ANNUAL SHAREHOLDER MEETING
Slide 34: Appendix
Appendix
Slide 35: Use of Non-GAAP Financial Measures
34 USE OF NON-GAAP FINANCIAL MEASURES The Company's accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as Core net inter
Slide 36: Reconciliation of Non-GAAP Financial Measures
35 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, (in thousands) 2016 2015 2015 2015 2015 CORE PERFORMANCE MEASURES Net interest income 32,428$ 32,079$ 30,006$ 29,280$ 29,045$ Less: Incremental accretion income 2,834 3,412 2,919 3,003 3,458 Core net interest in
Slide 37: Enterprise Financial Services Corp Annual Shareholder Meeting – May 5, 2016
Enterprise Financial Services Corp ANNUAL SHAREHOLDER MEETING – MAY 5, 2016
Enterprise Financial Services — Shareholder Meeting (May 2016) on 6ix