Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q3 2018 Earnings Presentation
23 slides from Enterprise Financial Services's earnings presentation, Oct 22, 2018
Slide 1: Enterprise Financial Services Corp 2018 Third Quarter Earnings Webcast
Enterprise Financial Services Corp 2018 Third 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 Q3 2018 Compared to Q3 2017
Financial Scorecard Q3 2018 Compared to Q3 2017 Continued Growth in Core EPS* 30% • Drive Net Interest Income Growth in 8% Dollars with Favorable Loan Growth Trends • Defend Core Net Interest Margin* 1 bps • Maintain High Quality Credit Profile 17 bps NPLs/Loans • Achieve Further Improvement in 1% O
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 6% Total Loan Growth In Millions $4,252 $4,250 $4,162 $4,067 $3,997 Q3 '17 Q4' 17 Q1' 18 Q2' 18 Q3' 18 5
Slide 6: Commercial & Industrial Loan Trends
Commercial & Industrial Loan Trends 9% C&I Growth In Millions $2,038 $2,033 $1,982 $1,919 $1,862 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 6
Slide 7: Portfolio Loan Details
Portfolio Loan Details QTR LTM Q3 ’18 Q2 ’18 Change Q3 ’17 Change In Millions C&I - General $ 968 $ 990 $ (22) $ 905 $ 63 CRE, Investor Owned - General 841 837 4 771 70 CRE, Owner Occupied - General 480 493 (13) 467 13 Enterprise Value Lending1 442 443 (1) 456 (14) Life Insurance Premium Financing1
Slide 8: Portfolio Loans By Business Unit
Portfolio Loans By Business Unit In Millions Specialized Lending St. Louis $2,335 $2,300 $860 $875 $901 $2,225 Q3 '17 Q2 '18 Q3 '18 Q3 '17 Q2 '18 Q3 '18 Kansas City Arizona $325 $331 $717 $718 $277 $635 Q3 '17 Q2 '18 Q3 '18 Q3 '17 Q2 '18 Q3 '18 8
Slide 9: Deposit Trend
Deposit Trend In Millions 27.0% 25.8% 25.7% 24.7% 25.2% $4,281 $4,248 $4,210 $4,156 $4,059 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Deposits DDA % u Last Twelve Months Growth Rate = 4% 9
Slide 10: Earnings Per Share - Q3 2018 Reported vs. Core EPS
Earnings Per Share - Q3 2018 Reported vs. Core EPS* $(0.03) $(0.08) $0.97 $0.86 EPS Non-Core Tax Adjustment Core EPS Acquired * A Non GAAP Measure, Refer to Appendix for Reconciliation 10
Slide 11: Earnings Per Share Trend - Q3 2018 Changes in Core EPS
Earnings Per Share Trend - Q3 2018 Changes in Core EPS* $0.02 $(0.02) $0.86 $0.86 Q2 '18 Net Interest Noninterest Q3 '18 Income Income 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 3.75% 3.73% 3.74% 3.75% 3.74% $46.8 $47.6 $45.4 $44.1 $44.9 8% Core NII Growth Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '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 In Millions Portfolio Loan Growth $138 33 bps $95 23 bps $90 $70 6bps 8 bps (2) bps $(2) Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 In Millions Provision for Portfolio Loans Q3 2018 EFSC Peer(2) NPA’s/Assets = 0.32% 0.5
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 $8.4 $0.2 $0.1 $2.2 $1.7 $1.9 $0.1 $1.8 $0.2 $1.5 $1.5 $0.1 $0.1 $1.8 $0.2 $0.3 $0.1 $0.2 $0.1 $0.6 $0.2 $0.2 $1.4 $2.3 $2.1 $1.9 $1.8 $1.4 $0.1 $0.2 $0.2 $2.9 $3.0 $2.8 $2.9 $3.0 $1.5
Slide 15: Operating Expenses Trend
Operating Expenses Trend* In Millions 54.0% 51.6% 52.4% 52.2% 50.2% $29.1 $29.2 $29.2 $28.1 $27.1 $15.3 $16.5 $16.6 $16.3 $15.1 $2.4 $2.4 $2.4 $2.4 $2.3 $9.6 $10.4 $10.2 $10.3 $10.5 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '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 $0.86 $0.84 $0.77 Four-Year CAGR 24% $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 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 Q3 '18 132% Core EPS
Slide 17: Third Quarter 2018 Earnings Webcast Appendix
Third Quarter 2018 Earnings Webcast Appendix
Slide 18: Earnings Per Share - Q3 2018 Year to Date Reported vs. Core EPS
Earnings Per Share - Q3 2018 Year to Date Reported vs. Core EPS* $0.01 $(0.18) $(0.08) $2.81 $2.56 EPS Non-Core Tax Adjustment Other Core EPS Acquired Assets * A Non GAAP Measure, Refer to Appendix for Reconciliation 18
Slide 19: Earnings Per Share Trend - Q3 2018 Year to Date Changes in Core EPS
Earnings Per Share Trend - Q3 2018 Year to Date Changes in Core EPS* $0.09 $0.03 $0.40 $(0.26) $0.49 $2.56 $1.81 Q3 '17 Net Interest Portfolio Loan Noninterest Noninterest Income Tax Q3 '18 Income Loss Provision Income Expense Expense Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
Slide 20: Effective Tax Rate Reconciliation
Effective Tax Rate Reconciliation YTD 2018 2017 Q4 2017 Federal Tax Rate 21.00% 35.00% 35.00% State Tax, Net of Federal Benefit 2.33% 1.94% 1.94% Excess Tax Benefits (2.13)% (2.47)% (1.25)% Tax Credit Investments (3.87)% (1.89)% (3.62)% Other Tax Adjustments 0.03% (2.28)% (3.90)% Pre-DTA Effective T
Slide 21: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company's accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as core net income a
Slide 22: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures For the Quarter ended For the Nine Months ended Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30, ($ in thousands, except per share data) 2018 2018 2018 2017 2017 2018 2017 CORE PERFORMANCE MEASURES Net interest income $ 48,093 $ 47,048 $ 46,171 $
Slide 23: Third Quarter 2018 Earnings Webcast Q & A
Third Quarter 2018 Earnings Webcast Q & A
Enterprise Financial Services — Q3 2018 Earnings Presentation on 6ix