Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q3 2017 Earnings Presentation
33 slides from Enterprise Financial Services's earnings presentation, Nov 14, 2017
Slide 1: Enterprise Financial Services Corp Third Quarter 2017 Investor Presentation
ENTERPRISE FINANCIAL SERVICES CORP THIRD QUARTER 2017 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statement
2 Forward-Looking Statement 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 us
Slide 3: Company Snapshot - EFSC
3 Company Snapshot - EFSC SNL Data TOTAL ASSETS $5.2 Billion MARKET CAP Concentrated on Private Businesses and Owner Families Relationship Driven Attract Top Talent in Markets Product Breadth • Banking • Trust & Wealth Management • Treasury Management Proven Ability to Grow Commercial & Industrial “
Slide 4: Executive Leadership Team
4 Executive Leadership Team James B. Lally, 49, President & Chief Executive Officer, EFSC 14 Keene S. Turner, 38, Executive Vice President & Chief Financial Officer, EFSC 4 Scott R. Goodman, 53, President, Enterprise Bank & Trust 14 Douglas N. Bauche, 47, Chief Credit Officer, Enterprise Bank & Trus
Slide 5: Differentiated Business Model: Built for Quality Earnings Growth
5 Differentiated Business Model: Built for Quality Earnings Growth Enterprise Bank Financial & Estate Planning Tax Credit Brokerage Business & Succession Planning Trust Administration Enterprise Trust Investment Management Enterprise University Treasury Management Personal & Private Banking Commerci
Slide 6: Three Urban Markets
6 Three Urban Markets Phoenix Kansas City St. Louis1 Loans $277MM $635MM $2.2B Deposits $114MM $724MM $3.2B Branches 2 7 19 Deposit Market Share 39th/0.12% 16th/1.29% 5th/4.23% Primary Competitors JP Morgan Chase Wells Fargo Bank of America UMB Commerce Bank of America US Bancorp Bank of America Com
Slide 7: Focused Loan Growth Strategies
7 Focused Loan Growth Strategies Tax Credit Programs. $188 Million in Loans Outstanding Related to Federal New Markets, Historic and Missouri Affordable Housing Tax Credits. $183 Million in Federal & State New Markets Tax Credits Awarded To Date. Enterprise Value Lending. $456 Million in M&A Related
Slide 8: History of Strong C&I Growth
8 History of Strong C&I Growth $880 $1,007 $1,172 $1,371 $1,599 $1,862 Q3 '12 Q3 '13 Q3 '14 Q3 '15 Q3 '16 Q3 '17 In Millions
Slide 9: Marketing & Sales Funnel
Awareness Interest Consideration Intent Evaluation Purchase 9 Marketing & Sales Funnel NOW… …FUTURE Marketing Sales Marketing Sales
Slide 10: Opportunities Exist - Client Satisfaction Drivers
10 Opportunities Exist - Client Satisfaction Drivers Client satisfaction scores are industry leading. We’re focused on leveraging ways to improve industry understanding and being a consultative partner to clients. 1. Ease of doing business 2. Relationship Satisfaction 3. Understanding of your indust
Slide 11: Acquisition of Jefferson County Bancshares, Inc. (JCB)
11 Acquisition of Jefferson County Bancshares, Inc. (JCB) Closed February 10, 2017 Consistent with M&A Expansion Strategy Enhanced EFSC’s footprint in the St. Louis MSA, while building total balance sheet size to $5 billion in assets Top five deposit market share in the St. Louis MSA • Successfully
Slide 12: Portfolio Loan Trends
12 Portfolio Loan Trends $3,038 $3,118 $3,853 $3,859 $3,997 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 In Millions *Note: 9% excluding acquisition of JCB JCB $678
Slide 13: Drivers of Loan Growth
13 Drivers of Loan Growth Enterprise Value Lending 6% Life Insurance Premium Finance 3% General Commercial & Industrial 4% Commercial/Construction RE 13% Tax Credits 4% JCB Acquisition 70% Enterprise Value Lending Life Insurance Premium Finance General Commercial & Industrial Commercial/Construction
Slide 14: Attractive Deposit Mix
26% 39%15% 20% 14 Attractive Deposit Mix CD Interest Bearing Transaction Accts DDA MMA & Savings SEPTEMBER 30, 2017 $4.1B • Significant DDA Composition • Stable Cost of Deposits • Improving Core Funding Cost of Deposits 0.46% 31% Core Deposit Growth Q3 2016 – Q3 2017 In Millions $3,125 $3,233 $4,032
Slide 15: Core Funding Mix
15 Core Funding Mix $80 (6%) $341 (25%) $408 (29%) $165 (12%) $233 (17%) $151 (11%) Consumer $169 (53%) $79 (24%) $44 (14%) $14 (4%) $12 (4%) $5 (1%) Business Banking DDA NOW MMA SAVINGS CD 1yr or less CD >1yr $800 (42%) $393 (20%) $663 (34%) $25 (1%) $37 (2%) $9 (1%) Commercial In Millions, Exclude
Slide 16: Financial Scorecard
16 Financial Scorecard Q3 2017 Compared to Q3 2016 40% Drive Net Interest Income Growth in Dollars with Favorable Loan Growth Trends 21 bps Defend Net Interest Margin 43 bps NPLs/Loans Maintain High Quality Credit Profile 1% Achieve Further Improvement in Operating Leverage Continued Growth in Core
Slide 17: Earnings Per Share
Earnings Per Share $0.69 < $0.04 > $0.01 $0.66 EPS Non‐Core Acquired Assets Merger Related Expenses Core EPS * A Non GAAP Measure, Refer to Appendix for Reconciliation Reported vs. Core EPS* Q3 2017 17
Slide 18: Earnings Per Share Trend
Earnings Per Share Trend $0.56 $0.04 $0.03 $0.01 $0.02 $0.66 Q2 '17 Net Interest Income Portfolio Loan Loss Provision Non Interest Income Non Interest Expense Q3 '17 Changes in Core EPS* Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation 18
Slide 19: Core Net Interest Income Trend
19 Core Net Interest Income Trend* In Millions Note: * A Non‐GAAP Measure, Refer to Appendix for Reconciliation $31.5 $32.2 $37.6 $43.0 $44.1 3.54% 3.44% 3.63% 3.76% 3.75% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 $11.0 $12.0 $13.0 $14.0 $15.0 $16.0 $17.0 $1
Slide 20: Credit Trends for Portfolio Loans
20 Credit Trends for Portfolio Loans 14 bps 12 bps ‐1 bps 64 bps 8 bps Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 2017 YTD NCO = 24 bps Q3 2017 EFSC PEER(3) NPA’S/ASSETS = 0.18% 0.71% NPL’S/LOANS = 0.23% 0.85% ALLL/NPL’S = 426.2% 112.3% ALLL/LOANS = 0.97% 1.03% (1) Portfolio loans only, excludes non‐core ac
Slide 21: Core Fee Income
Core Fee Income* Note: * A Non‐GAAP Measure, Refer to Appendix for Reconciliation Other Core Fee Income DetailCore Fee Income $1.7 $1.7 $1.8 $2.0 $2.1 $2.2 $2.2 $2.5 $2.8 $2.8 $1.9 $1.3 $1.5 $1.7 $1.9$0.2 $1.7 $0.2 $0.1 $0.8 $0.9 $1.0 $1.4 $1.5 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Wealth Management De
Slide 22: Operating Expenses Trend
Operating Expenses Trend* In Millions Note: * A Non‐GAAP Measure, Refer to Appendix for Reconciliation $6.4 $7.0 $7.8 $9.7 $9.6 $1.7 $1.7 $1.9 $2.3 $2.4 $12.1 $12.4 $15.2 $15.8 $15.1 52.8% 52.7% 56.0% 54.5% 51.6% ‐3 2 7 12 17 22 27 32 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Other Occupancy Employee compe
Slide 23: Positive Momentum in Core Earnings Per Share
23 Positive Momentum in Core* Earnings Per Share $0.37 $0.33 $0.35 $0.38 $0.44 $0.49 $0.47 $0.49 $0.49 $0.59 $0.59 $0.56 $0.66 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 Note: * A Non‐GAAP Measure, Refer to Appendix for Reconciliation 78% Core EPS Grow
Slide 24: Three-Year Financial Highlights
24 Three-Year Financial Highlights Note: Core is a Non GAAP Measure, Refer to Appendix for Reconciliation Total Core Non‐Interest Income Core Net Income Core Earnings Per Share (diluted) Core Return on Average Equity Core Return on Average Assets Total Assets Core Net Interest Income $26,787 $41,237
Slide 25: Capital Levels Prudently Managed to Facilitate Growth and Returns
25 Capital Levels Prudently Managed to Facilitate Growth and Returns • 2,000,000 Share Common Stock Repurchase Plan • ~ 10% of EFSC Outstanding Shares • No Specified End Date • Disciplined, Patient Approach Based on Market Conditions • Repurchased 429,955 shares at an average price of $38.69 in the
Slide 26: Enterprise Financial
26 Enterprise Financial • Highly Focused, Proven Business Model • Strong Track Record of Commercial Loan Growth • Differentiated Competitive Lending Expertise • Enhanced Core Funding Capabilities • Increased Returns and Enhanced Shareholder Value 162% 91% EFSC Index 3‐Year Total Shareholder Return N
Slide 27: Appendix
Appendix 3Q 2017 EFSC INVESTOR PRESENTATION
Slide 28: Balance Sheet Positioned for Growth
28 Balance Sheet Positioned for Growth Modest Asset Sensitivity (200 BPS Rate Shock Increases NII By 3.2%) 57% Floating Rate Loans, with Three‐Year Average Duration High‐quality, Cash‐flowing Securities Portfolio with Four‐Year Average Duration 26% Non‐Interest Bearing DDA to Total Deposits 8.18% Ta
Slide 29: Successful FDIC-Assisted Acquisition Strategy
29 Successful FDIC-Assisted Acquisition Strategy Significant Earnings Contribution (Pre‐tax) Terminated all loss share agreements with the FDIC in December 2015 Early termination charge from Q4 2015 earned back 100% in Q1 2016 2015 2016 AS OF 9/30/17 $7,529 $15,018 $5,444 Dollars in Thousands Accret
Slide 30: Use of Non-GAAP Financial Measures
30 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 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 31
Slide 32: Q&A
Q&A 3Q 2017 EFSC INVESTOR PRESENTATION
Slide 33: Zz ENTERPRISE
Zz ENTERPRISE
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