Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q4 2019 Earnings Presentation
21 slides from Enterprise Financial Services's earnings presentation, Jan 21, 2020
Slide 1: 2019 Fourth Quarter Earnings Webcast
Exhibit 99.2 Enterprise Financial Services Corp 2019 Fourth 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: Financial Scorecard Q4 2019 Compared to Q4 2018
Financial Scorecard Q4 2019 Compared to Q4 2018 Continued Growth in EPS 7% • Drive Net Interest Income Growth in Dollars with Favorable Loan Growth Trends 22% • Defend Core Net Interest Margin* 13 bps • Maintain High Quality Credit Profile 12 bps NPLs/Loans • Achieve Further Improvement in Core Oper
Slide 4: EFSC Priorities
EFSC Priorities • Closing and Integration of the Trinity Acquisition ü • Achieve Organic Loan and Deposit Goals ü • Continued Incremental Improvement of Our Sales and Operational Processes ü Note: Blue represents a completed 2019 priority and orange represents ongoing priorities 4
Slide 5: Total Loan Trends
Total Loan Trends 22% Total Loan Growth* $5,314 $5,228 $5,149 $5,017 In Millions Trinity $682 $4,350 Q4' 18 Q1' 19 Q2' 19 Q3' 19 Q4' 19 *Note: 6% Excluding Acquisition of Trinity, 7.5% legacy Enterprise 5
Slide 6: Commercial & Industrial Loan Trends
Commercial & Industrial Loan Trends 11% C&I Growth* $2,361 In Millions $2,303 $2,265 $2,227 Trinity $2,123 $65 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 *Note: 8% Excluding Acquisition of Trinity, 8.2% legacy Enterprise 6
Slide 7: Loan Details
Loan Details Q4 ’19 Q3 ’19 QTR Q4 ’18 LTM Trinity2 In Millions Change Change C&I - General $ 1,187 $ 1,175 $ 12 $ 995 $ 192 $ 65 CRE, Investor Owned - General 1,290 1,281 9 862 428 305 CRE, Owner Occupied - General 582 566 16 497 85 92 Enterprise Value Lending1 429 417 12 466 (37) — Life Insurance P
Slide 8: Total Loans By Business Unit
Total Loans By Business Unit In Millions Specialized Lending St. Louis Kansas City $2,312 $2,420 $2,463 $972 $1,003 $816 $965 $719 $785 Q4 '18 Q3 '19 Q4 '19 Q4 '18 Q3 '19 Q4 '19 Q4 '18 Q3 '19 Q4 '19 Arizona New Mexico* $663 $640 $354 $388 $392 Q4 '18 Q3 '19 Q4 '19 Q4 '18 Q3 '19 Q4 '19 * Acquisition
Slide 9: Deposit Trend
Deposit Trend 24.0% 23.0% 23.0% 21.4% 21.3% In Millions $5,771 $5,624 $5,537 $5,559 Trinity $1,094 $4,588 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Deposits Trinity Noninterest-bearing % u Last Twelve Months Growth Rate = 26%, 2% Excluding Acquisition of Trinity, 3.5% legacy Enterprise 9
Slide 10: Earnings Per Share Trend - 2019
Earnings Per Share Trend - 2019 Change in EPS $0.17 $0.64 $0.02 $0.03 $(0.43) $(0.47) $(0.24) $3.83 $3.55 2018 Net Interest Incremental Loan Loss Noninterest Noninterest Merger-Related Change in 2019 Income Accretion Provision Income Expense Expense ETR 10
Slide 11: Earnings Per Share Trend - Q4 2019
Earnings Per Share Trend - Q4 2019 Change in EPS $0.03 $0.01 $0.01 $0.01 $(0.01) $(0.04) $1.08 $1.09 Q3 '19 Incremental Loan Loss Noninterest Noninterest Merger-Related Change in Q4 '19 Accretion Provision Income Expense Expenses Shares/ ETR 11
Slide 12: Net Interest Income Trend
Net Interest Income Trend 3.77% 3.79% 3.80% 3.69% 3.64% In Millions $61.7 $63.0 $61.6 $60.8 $60.9 $61.0 $52.3 $50.6 $51.2 $48.5 26% Core NII Growth Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Core Net Interest Income* Incremental Accretion On Non-core Acquired Assets FTE Core Net Interest Margin* Note: * A N
Slide 13: Credit Trends for Loans
Credit Trends for Loans Net Charge-offs (annualized) Total Loan Growth (1) In Millions $132 $83 $79 $86 26 bps 19 bps 16 bps 8 bps 8 bps $(15) Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Provision for Loan Losses Q4 2019 EFSC Peer(2) In Millions NPAs/Assets = 0.45% 0.64% $2
Slide 14: Noninterest Income Trend
Noninterest Income Trend In Millions Fee Income Other Fee Income Detail $14.4 $13.6 $12.0 $1.2 $3.4 $4.0 $10.7 $0.6 $4.0 $1.0 $2.9 $2.3 $9.2 $2.7 $0.2 $2.9 $0.2 $2.7 $2.3 $2.4 $2.5 $1.7 $2.4 $2.3 $0.4 $0.2 $0.2 $0.2 $0.4 $1.8 $1.8 $0.3 $0.4 $0.2 $1.7 $0.1 $0.3 $0.8 $3.4 $3.2 $3.3 $0.3 $0.2 $2.9 $2.9
Slide 15: Operating Expenses Trend
Operating Expenses Trend 54.1% 53.3% 51.7% 49.8% 50.7% In Millions $49.1 $10.3 $39.8 $38.2 $38.4 $7.3 $0.4 $30.7 $1.3 $20.7 $20.8 $20.4 $19.4 $16.6 $3.2 $3.2 $3.5 $2.4 $2.6 $14.9 $13.8 $14.5 $10.4 $10.5 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Other Occupancy Employee compensation and benefits Merger-rela
Slide 16: Positive Momentum in Earnings Per Share
Positive Momentum in Earnings Per Share $1.08 $1.09 $1.02 $0.97 $0.95 Five-Year CAGR 29% $0.90 $0.69 $0.67 $0.67 $0.68 $0.61 $0.59 $0.56 $0.54 $0.52 $0.50 $0.48 $0.46 $0.43 $0.32 $0.30 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4
Slide 17: Appendix
Fourth Quarter 2019 Earnings Webcast Appendix
Slide 18: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as adjusted EPS, cor
Slide 19: Effective Tax Rate Reconciliation
Effective Tax Rate Reconciliation 2019 2018 Federal Tax Rate 21.00% 21.00% State Tax, Net of Federal Benefit 2.32% 2.32% Excess Tax Benefits (0.45)% (1.56)% Tax Credit Investments (1.05)% (4.66)% Merger Expenses 0.22% —% Other Tax Adjustments (1.96)% 0.23% Pre-DTA Effective Tax Rate 20.08% 17.33% Im
Slide 20: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, Dec 31, ($ in thousands) 2019 2019 2019 2019 2018 2019 2018 CORE PERFORMANCE MEASURES Net interest income $ 61,613 $ 63,046 $ 61,715 $ 52,343 $ 50,593 $ 238,717 $ 191,905 Less: Incr
Slide 21: Q & A
Fourth Quarter 2019 Earnings Webcast Q & A
Enterprise Financial Services — Q4 2019 Earnings Presentation on 6ix