Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q2 2018 Earnings Presentation
23 slides from Enterprise Financial Services's earnings presentation, Jul 23, 2018
Slide 1: Enterprise Financial Services Corp 2018 Second Quarter Earnings Webcast
Enterprise Financial Services Corp 2018 Second Quarter Earnings Webcast
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information in this report contains “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. Forward-looking statements typically are identified with use
Slide 3: Financial Scorecard Q2 2018 Compared to Q2 2017
Financial Scorecard Q2 2018 Compared to Q2 2017 Continued Growth in Core EPS* 54% • Drive Net Interest Income Growth in 9% Dollars with Favorable Loan Growth Trends • Defend Core Net Interest Margin* 1 bps • Maintain High Quality Credit Profile 1 bps NPLs/Loans • Achieve Further Improvement in 2% Op
Slide 4: 2018 Focus
2018 Focus • Achieve Organic Loan and Deposit Growth • Maintain Focus on Long-Term Strategic Development • Improve Overall Sales Culture Through a Refreshed Sales Process and External Message 4
Slide 5: Portfolio Loan Trends
Portfolio Loan Trends 10% Total Loan Growth In Millions $4,252 $4,162 $4,067 $3,997 $3,859 Q2' 17 Q3 '17 Q4' 17 Q1' 18 Q2' 18 5
Slide 6: Commercial & Industrial Loan Trends
Commercial & Industrial Loan Trends 13% C&I Growth $2,038 $1,982 In Millions $1,919 $1,862 $1,796 Q2'17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 6
Slide 7: Portfolio Loan Details
Portfolio Loan Details QTR LTM Q2 ’18 Q1 ’18 Change Q2 ‘17 Change In Millions C&I - General $ 990 $ 946 $ 44 $ 905 $ 85 CRE, Investor Owned - General 837 837 — 747 90 CRE, Owner Occupied - General 493 471 22 449 44 Enterprise Value Lending1 443 439 4 434 9 Life Insurance Premium Financing1 359 365 (
Slide 8: Portfolio Loans By Business Unit
Portfolio Loans By Business Unit In Millions Specialized Lending St. Louis $2,335 $877 $875 $2,198 $2,298 $803 Q2 '17 Q1 '18 Q2 '18 Q2 '17 Q1 '18 Q2 '18 Kansas City Arizona $305 $325 $682 $717 $607 $251 Q2 '17 Q1 '18 Q2 '18 Q2 '17 Q1 '18 Q2 '18 8
Slide 9: Deposit Trend
Deposit Trend In Millions 27.0% 26.0% 25.8% 25.7% 24.7% $4,281 $4,248 $4,156 $4,059 $3,921 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Deposits DDA % u Last Twelve Months Growth Rate = 8% 9
Slide 10: Earnings Per Share - Q2 2018 Reported vs. Core EPS
Earnings Per Share - Q2 2018 Reported vs. Core EPS* $(0.08) $(0.01) $0.95 $0.86 EPS Non-Core Other Core EPS Acquired Assets * A Non GAAP Measure, Refer to Appendix for Reconciliation 10
Slide 11: Earnings Per Share Trend - Q2 2018 Changes in Core EPS
Earnings Per Share Trend - Q2 2018 Changes in Core EPS* $0.02 $0.05 $(0.02) $(0.03) $0.84 $0.86 Q1 '18 Net Interest Portfolio Loan Noninterest Income Tax Q2 '18 Income Loss Provision Income Expense Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation 11
Slide 12: Core Net Interest Income Trend
Core Net Interest Income Trend* In Millions 3.76% 3.75% 3.73% 3.74% 3.75% $46.8 $45.4 $44.1 $44.9 $43.0 9% Core NII Growth Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Core Net Interest Income FTE Core Net Interest Margin Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation 12
Slide 13: Credit Trends for Portfolio Loans
Credit Trends for Portfolio Loans (1) Net Charge-offs Portfolio Loan Growth 64 bps $138 In Millions $95 $90 33 bps $70 6 bps 8 bps (2) bps $7 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 In Millions Provision for Portfolio Loans Q2 2018 EFSC Peer(2) NPA’s/Assets = 0.28% 0.55
Slide 14: Core Fee Income
Core Fee Income* In Millions Core Fee Income Other Core Fee Income Detail $11.1 $1.5 $2.3 $9.0 $0.2 $2.1 $8.4 $8.5 $1.9 $0.2 $0.1 $7.9 $2.2 $1.8 $0.2 $1.5 $1.7 $1.7 $0.1 $1.5 $0.2 $0.1 $1.4 $0.1 $0.1 $0.6 $0.2 $0.3 $0.1 $0.2 $0.2 $0.1 $2.3 $2.1 $1.7 $1.9 $1.8 $0.4 $2.9 $2.8 $2.8 $2.9 $3.0 $1.5 $1.5
Slide 15: Operating Expenses Trend
Operating Expenses Trend* In Millions 54.5% 54.0% 51.6% 52.4% 50.2% $29.1 $29.2 $27.8 $28.1 $27.1 $15.3 $16.5 $16.6 $15.8 $15.1 $2.4 $2.3 $2.4 $2.4 $2.3 $9.7 $9.6 $10.4 $10.2 $10.3 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Other Occupancy Employee compensation and benefits Core Efficiency Ratio* Note: * A
Slide 16: Positive Momentum in Core Earnings Per Share
Positive Momentum in Core Earnings Per Share* $0.86 $0.84 $0.77 Four-Year CAGR 29% $0.66 $0.59 $0.59 $0.56 $0.49 $0.49 $0.49 $0.47 $0.44 $0.37 $0.38 $0.35 $0.33 $0.31 Q2 '14 Q3 '14 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 '18 177% Core EPS
Slide 17: Second Quarter 2018 Earnings Webcast Appendix
Second Quarter 2018 Earnings Webcast Appendix
Slide 18: Earnings Per Share - Q2 2018 Year to Date Reported vs. Core EPS
Earnings Per Share - Q2 2018 Year to Date Reported vs. Core EPS* $(0.14) $(0.01) $1.85 $1.70 EPS Non-Core Other Core EPS Acquired Assets * A Non GAAP Measure, Refer to Appendix for Reconciliation 18
Slide 19: Earnings Per Share Trend - Q2 2018 Year to Date Changes in Core EPS
Earnings Per Share Trend - Q2 2018 Year to Date Changes in Core EPS* $0.25 $0.08 $0.03 $(0.17) $0.36 $1.70 $1.15 Q2 '17 Net Interest Portfolio Loan Noninterest Noninterest Income Tax Q2 '18 Income Loss Provision Income Expense Expense Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
Slide 20: Effective Tax Rate Reconciliation
Effective Tax Rate Reconciliation YTD 2018 2017 Q4 2017 Federal Tax Rate 21.00% 35.00% 35.00% State Tax, Net of Federal Benefit 2.63% 1.94% 1.94% Excess Tax Benefits (2.84)% (2.47)% (1.25)% Tax Credit Investments (3.71)% (1.89)% (3.62)% Other Tax Adjustments (0.37)% (2.28)% (3.90)% Pre-DTA Effective
Slide 21: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company's accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as core net interest
Slide 22: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures For the Quarter ended For the Six Months ended Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30, ($ in thousands, except per share data) 2018 2018 2017 2017 2017 2018 2017 CORE PERFORMANCE MEASURES Net interest income $ 47,048 $ 46,171 $ 47,404 $ 4
Slide 23: Second Quarter 2018 Earnings Webcast Q & A
Second Quarter 2018 Earnings Webcast Q & A
Enterprise Financial Services — Q2 2018 Earnings Presentation on 6ix