Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q3 2024 Earnings Presentation
29 slides from Enterprise Financial Services's earnings presentation, Oct 22, 2024
Slide 1: Enterprise Financial Services Corp 2024 Third Quarter Earnings Webcast
Exhibit 99.2 Enterprise Financial Services Corp 2024 Third 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 Highlights - 3Q24
Financial Highlights - 3Q24* • Net Income $50.6 million, up $5.1 million; EPS $1.32 • Net Interest Income $143.5 million, up $2.9 million; NIM 4.17% Earnings • PPNR** $65.1 million, up $1.8 million • Adjusted ROAA** 1.32%, compared to 1.27%; PPNR ROAA** 1.74%, compared to 1.74% • Adjusted ROATCE** 1
Slide 4: Financial Highlights, continued - 3Q24
Financial Highlights, continued - 3Q24* • Loans $11.1 billion, up $79.9 million • Loan/Deposit Ratio 89% Loans & • Deposits $12.5 billion, up $182.9 million or $196.9 million Deposits excluding brokered CDs • Noninterest-bearing Deposits/Total Deposits 32% • Nonperforming Loans/Loans 0.26% Asset • N
Slide 5: Areas of Focus
Areas of Focus Organic Loan and Deposit Growth • Continue Funding Loan Growth with Customer Deposits • Build Franchise Value by Expanding Existing and Acquiring New Relationships Disciplined Loan and Deposit Pricing Focused Credit Underwriting and Monitoring Focus on Long-term Earnings Trajectory Co
Slide 6: Loan Trends
Loan Trends 4% Total Loan Growth $ In Millions $11,028 $11,000 $11,080 $10,884 $10,617 3Q23 4Q23 1Q24 2Q24 3Q24 6
Slide 7: Loan Details
Loan Details $ In Millions Qtr LTM 3Q24 2Q24 3Q23 Change Change C&I $ 2,145 $ 2,107 $ 2,020 $ 38 $ 125 CRE Investor Owned 2,347 2,309 2,260 38 87 CRE Owner Occupied 1,323 1,314 1,256 9 67 SBA loans* 1,273 1,269 1,309 4 (36) Sponsor Finance* 819 866 888 (47) (69) Life Insurance Premium Financing* 1,0
Slide 8: Loans By Region
Loans By Region $ In Millions Specialty Lending Midwest $3,871 $3,959 $3,990 $3,260 $3,279 $3,194 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Southwest West $1,844 $1,940 $1,649 $1,680 $1,755 $1,464 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Note: Excludes “Other” loans; Region Components: Midwest (St. Louis & Kansas City), S
Slide 9: Deposit Details
Deposit Details $ In Millions Qtr LTM 3Q24 2Q24 3Q23 Change Change Noninterest-bearing demand accounts $ 3,934 $ 3,928 $ 3,852 $ 6 $ 82 Interest-bearing demand accounts 3,049 2,952 2,750 97 299 Money market accounts 3,568 3,474 3,211 94 357 Savings accounts 553 565 626 (12) (73) Certificates of depo
Slide 10: Deposits By Region
Deposits By Region $ In Millions Deposit Verticals** Midwest(*)** $6,098 $6,111 $6,205 $3,033 $3,093 $2,693 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Southwest West* $1,984 $1,971 $1,802 $1,317 $1,196 $1,154 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ,
Slide 11: Differentiated Deposit Verticals
Differentiated Deposit Verticals 25.5% • $3.09 billion - 25% of total deposits • $3.24 billion - Average deposits for 3Q24 • $23.8 million - Related deposit costs in noninterest expense, resulting in an average deposit vertical cost of 2.92% in 3Q24 • $144.3 million - Average Deposits per Branch for
Slide 12: Core Funding Mix
Core Funding Mix Commercial Business Banking Consumer Deposit Verticals $ In Millions $4,453 $1,404 $2,794 $3,093 4% 6% 4% 30% 30% 19% 22% 3Q24 41% 30% 36% 60% 17% 3% 38% 32% 21% Net New/Closed Deposit Accounts Overview BUSINESS DEPOSIT COMMERCIAL CONSUMER BANKING VERTICALS • Estimated uninsured dep
Slide 13: Earnings Per Share Trend - 3Q24
Earnings Per Share Trend - 3Q24 Change in Diluted EPS $0.18 $0.02 $0.02 $(0.09) $1.32 $1.19 2Q24 Operating Provision for Credit Noninterest Change in ETR 3Q24 Revenue Losses Expense 13
Slide 14: Net Interest Income Trend
Net Interest Income Trend $ In Millions Stable Net Interest Income $141.6 $140.7 $140.5 $143.5 $137.7 5.26% 5.33% 5.33% 5.33% 5.27% 4.33% 4.23% 4.13% 4.19% 4.17% 3Q23 4Q23 1Q24 2Q24 3Q24 Net Interest Income Net Interest Margin Avg Fed Funds Rate 3Q23 4Q23 1Q24 2Q24 3Q24 Net Interest Income - FTE $ 1
Slide 15: Net Interest Margin
Net Interest Margin Margin Bridge 0.01% (0.02)% (0.01)% 4.19% 4.17% 2Q24 Other Earning Asset Mix Funding Mix Cost of Funds 3Q24 Components of Interest-earning Assets Components of Interest-bearing Liabilities 6.80% 6.87% 6.87% 6.95% 6.95% 3.22% 3.26% 3.28% 3.09% 2.84% 3.14% 3.19% 3.22% 6.20% 6.20% 6
Slide 16: Credit Trends
Credit Trends Annualized Net Charge-offs to Average Loans Loan Growth and Average Line of Credit Utilization 41.0% 42.0% 44.4% 45.8% 44.1% 106 bps $ In Millions $267 $104 $144 $80 22 bps 14 bps 26 bps 2 bps $(28.5) 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Organic Loans Avg Line Draw % Provi
Slide 17: Allowance for Credit Losses for Loans
Allowance for Credit Losses for Loans Key Assumptions: 3Q24 ACL as a % of • Reasonable and supportable forecast Loans ACL $ In Millions Loans period is one year with a one year reversion period. Commercial and industrial $ 4,628 $ 64 1.38 % • Forecast considers a weighted average Commercial real est
Slide 18: Noninterest Income Trend
Noninterest Income Trend $ In Millions Noninterest Income Other Noninterest Income Detail $8.3 15.3% 13.0% 7.9% 8.1% 9.9% $25.5 $6.3 $3.2 $2.5 $21.4 $0.7 $2.7 $5.4 $2.6 $5.0 $4.3 $1.0 $15.5 $2.6 $0.6 $12.1 $1.5 $12.2 $0.2 $1.4 $4.0 $2.6 $4.6 $2.6 $2.6 $0.2 $0.4 $1.2 $1.3 $9.7 $2.5 $0.3 $0.2 $0.3 $2.
Slide 19: Noninterest Expense Trend
Noninterest Expense Trend $ In Millions Noninterest Expense Other Noninterest Expense Detail 56.2% 60.2% 58.1% 58.4% 53.1% $98.0 $24.6 $24.4 $92.6 $93.5 $94.0 $23.6 $88.6 $22.7 $1.1 $23.0 $0.9 $0.9 $1.1 $2.7 $1.0 $2.2 $2.3 $2.1 $2.1 $2.7 $3.3 $45.4 $3.1 $39.7 $45.3 $44.5 $2.9 $3.0 $40.7 $1.1 $1.6 $1
Slide 20: Capital
Capital Tangible Common Equity/Tangible Assets TBV and Dividends per Share 9.50% 9.18% $0.27 8.96% 9.01% $0.25 $0.25 $0.25 $0.26 8.51% $33.85 $34.21 $35.02 $37.26 $31.06 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Tangible Common Equity/Tangible Assets* TBV/Share* Dividends per Share EFSC Capi
Slide 21: Appendix
Appendix
Slide 22: Investment Portfolio
Investment Portfolio Investment Portfolio Breakout AFS & HTM Securities $ In Millions Obligations of U.S. $2,400 $160 Government- sponsored enterprises Obligations of states and political $1,600 $— 11% subdivisions TOTAL 42% U.S. Treasury $2.6 billion $800 $(160) bills 6% $— $(320) Corporate debt Ag
Slide 23: Liquidity
Liquidity Strong Liquidity Profile $ In Billions EFSC Borrowing Capacity 42% 42% 43% • $1.2 billion available FHLB capacity $5.1 $5.1 $5.3 • $2.6 billion available FRB capacity • $140.0 million in seven federal funds lines $1.1 $1.2 $1.4 $0.1 $0.1 $0.1 • $1.4 billion in unpledged investment securiti
Slide 24: Office CRE (Non-owner Occupied)
Office CRE (Non-owner Occupied) Total $503.1 million Office CRE Loans by Location Office CRE Loans by Industry Type Southwest 27.5% Real Estate/ Rental/Leasing 87.7% Midwest West 46.9% 20.6% Specialty 5.0% Health Care Other and Social 8.9% Assistance 3.4% • Average loan-to-origination value 52% Offi
Slide 25: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended September 30, June 30, March 31, December 31, September 30, ($ in thousands) 2024 2024 2024 2023 2023 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,832,011 $ 1,755,273 $ 1,731,72
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended September 30, June 30, March 31, December 31, September 30, ($ in thousands) 2024 2024 2024 2023 2023 RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) AND RETURN ON AVERAGE ASSETS (ROAA) Average shareholder’s equity $ 1,804,369 $ 1,748,240
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended September 30, June 30, March 31, December 31, September 30, ($ in thousands) 2024 2024 2024 2023 2023 ALLOWANCE COVERAGE RATIO ADJUSTED FOR GUARANTEED LOANS Loans (GAAP) $ 11,079,892 $11,000,007 $11,028,492 $10,884,118 $ 10,616,820 Less gua
Slide 29: Enterprise Financial Services Corp
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Enterprise Financial Services — Q3 2024 Earnings Presentation on 6ix