46 slides from Enterprise Financial Services's earnings presentation, Nov 14, 2023
Slide 1: Enterprise Financial Services Corp 2023 Third Quarter Investor Presentation
Enterprise Financial Services Corp 2023 Third Quarter Investor Presentation Exhibit 99.1
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: Company Highlights
Enterprise Financial Services Corp Guiding People to a Lifetime of Financial Success Company Highlights Vision To be a company where our associates are proud to work, that delivers ease of navigation to our customers and value to our investors, while helping our communities flourish. Target Market P
Slide 4: Peer Banks $10-50B Comparison
Peer Banks $10-50B Median Top Quartile 3Q23 YTD FY2022 Return on average assets 1.47 % 1.52 % 1.15 % 1.32 % Return on average tangible common equity(1) 16.90 % 19.10 % 15.58 % 17.87 % Net interest margin 4.50 % 3.89 % 3.29 % 3.46 % Efficiency ratio(2) 53.55 % 49.77 % 53.49 % 48.98 % Tangible common
Slide 5: Executive Leadership Team
Executive Leadership Team JAMES B. LALLY 55, President & Chief Executive Officer, EFSC Enterprise Tenure – 20 years KEENE S. TURNER 44, SEVP, Chief Financial Officer, EFSC Enterprise Tenure – 10 years SCOTT R. GOODMAN 60, SEVP, President, Enterprise Bank & Trust Enterprise Tenure – 20 years DOUGLAS
Slide 6: Company Snapshot - EFSC
Company Snapshot - EFSC Total Assets $14.0 Billion Market Cap* Operates in St. Louis Kansas City Phoenix $1.4 Billion • Proven Ability to Grow Commercial & Industrial “C&I” Loans • Product Breadth ◦ Commercial and Specialty Lending ◦ SBA ◦ Specialty Deposits ◦ Card Services ◦ Treasury Management • R
Slide 7: Differentiated Business Model
Differentiated Business Model Focused and Well-Defined Strategy Aimed at Business Owners, Executives and Professionals. Experienced Bankers and Advisors Community Banking • Business banking model • C&I focus • Treasury management services • CRE lending • Consumer loans/ deposits • 42 branch location
Slide 8: Best-In-Class Technology Partnerships
Best-In-Class Technology Partnerships Client journey supported by a competitive digital product set. Customer surveys Salesforce integrated with core for 360 client view Client Portal Online Banking integrated with treasury products Integrations for APIs for HOA/PM Positive Pay (Check & ACH) TARGET
Slide 9: Diversified Revenue
Diversified Revenue (2022 financial data) Treasury Management $1.9B in Assets Under Management Card Services Tax Credit Services Mortgage Banking Community Development Other Services Midwest Southwest West Specialty Lending Net Interest Income Noninterest Income Midwest 35.8% Southwest 16.3% West 15
Slide 10: Regional and National Markets
Regional and National Markets 1 Source: 06/30/23 data for market rank and market share; S&P Global Market Intelligence. $3.9 $3.3 $1.5 $1.8 $3.2 $5.6 $1.8 $1.3 Loans* Deposits Specialty Midwest Southwest West $— $2.5 $5.0 MSA Branches Deposit Market Rank1 Deposit Market Share1 St. Louis, MO-IL 17 5
Slide 11: Focused Loan Growth Strategies
6.4% 8.4% 8.7% 12.3% Focused Loan Growth Strategies Total Loans Specialty market segments represent 36% of total loans, offering competitive advantages, risk adjusted pricing and fee income opportunities. Tax Credit Programs $684 million in loans outstanding related to Federal, Historic, and Afforda
Slide 12: Total Loan Trends
Total Loan Trends $4,350 $5,314 $7,225 $9,018 $9,737 $10,617 94.8% 92.1% 90.5% 79.5% 89.9% 89.1% Loans PPP Loans/Deposits 2018 2019 2020 2021 2022 3Q23 In Millions PPP $272 PPP $699 12
Slide 13: Drivers of Loan Growth - Year over Year
Portfolio Balance Pe rc en ta ge G ro w th $0.0B $0.5B $1.0B $1.5B $2.0B $2.5B $3.0B $3.5B $4.0B $4.5B $5.0B (50)% (25)% 0% 25% 50% 75% 100% Drivers of Loan Growth - Year over Year 32% Commercial/Construction RE C&I PPP Life Insurance Premium Finance Sponsor Finance Residential RE Tax Credits SBA Ot
Slide 14: Loan Portfolio
Loan Portfolio Total $10.6 Billion CRE 33.1% Construction 6.0% Residential 3.4% Other 2.5% Sponsor Finance 8.4% LIPF 8.8% Tax Credit 6.5% SBA 12.3% C&I 19.0% Loans by Product Type Real Estate/ Rental/Leasing 25.5% Finance and Insurance 17.2% Accommodation/ Food Service 8.9% Manufacturing 6.6% Constr
Slide 15: Office CRE (Non-owner Occupied)
Office CRE (Non-owner Occupied) Total $483.6 Million Midwest 50.2% Southwest 29.6% West 14.9% Specialty 5.3% Office CRE Loans by Location Real Estate/ Rental/Leasing 85.8% Information 1.8% Health Care and Social Assistance 3.3% Professional Services 1.9% Wholesale Trade 1.8% Finance and Insurance 1.
Slide 16: Loan Details - LTM
Loan Details - LTM 3Q23 3Q22 LTM Change C&I $ 2,020 $ 1,781 $ 239 CRE Investor Owned 2,260 2,106 154 CRE Owner Occupied 1,256 1,133 123 SBA loans* 1,309 1,269 40 Sponsor Finance* 888 650 238 Life Insurance Premium Finance* 928 780 148 Tax Credits* 684 508 176 Residential Real Estate 365 382 (17) Con
Slide 17: Loan Details - QTR
Loan Details - QTR 3Q23 2Q23 QTR Change C&I $ 2,020 $ 2,029 $ (9) CRE Investor Owned 2,260 2,291 (31) CRE Owner Occupied 1,256 1,209 47 SBA loans* 1,309 1,328 (19) Sponsor Finance* 888 880 8 Life Insurance Premium Finance* 928 912 16 Tax Credits* 684 609 75 Residential Real Estate 365 355 10 Constru
Slide 18: Loans By Region
Loans By Region Specialty Lending $3,241 $3,734 $3,871 3Q22 2Q23 3Q23 In Millions Midwest $3,115 $3,320 $3,260 3Q22 2Q23 3Q23 Southwest $1,161 $1,415 $1,464 3Q22 2Q23 3Q23 Note: Excludes PPP and Other loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), Wes
Slide 19: Deposit Details - LTM
Deposit Details - LTM 3Q23 3Q22 LTM Change Noninterest-bearing demand accounts $ 3,852 $ 4,643 $ (791) Interest-bearing demand accounts 2,750 2,271 479 Money market accounts 3,211 2,793 418 Savings accounts 626 824 (198) Certificates of deposit: Brokered 696 129 567 Other 775 398 377 Total Deposits
Slide 20: Deposit Details - QTR
Deposit Details - QTR 3Q23 2Q23 QTR Change Noninterest-bearing demand accounts $ 3,852 $ 3,881 $ (29) Interest-bearing demand accounts 2,750 2,629 121 Money market accounts 3,211 2,913 298 Savings accounts 626 665 (39) Certificates of deposit: Brokered 696 894 (198) Other 775 638 137 Total Deposits
Slide 21: Deposits By Region
Deposits By Region Specialty Deposits $2,422 $2,861 $3,164 3Q22 2Q23 3Q23 In Millions Midwest* $5,221 $5,640 $5,627 3Q22 2Q23 3Q23 Southwest $1,827 $1,811 $1,802 3Q22 2Q23 3Q23 West* $1,588 $1,308 $1,317 3Q22 2Q23 3Q23 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, La
Slide 22: Deposit Mix - Total Deposits $11.9 Billion
24.0% 23.0% 34.0% 40.4% 42.9% 32.3% 32% 32%13% 23% $4,588 $5,771 $7,985 $11,344 $10,829 $11,910 0.79% 0.92% 0.32% 0.11% 0.27% 1.42% Deposits Cost of deposits Noninterest bearing % 2018 2019 2020 2021 2022 3Q23 YTD Deposit Mix CD Interest-Bearing Demand Accounts DDA MMA & Savings In Millions Total De
Slide 23: Specialty Deposits
Specialty Deposits 35.6%26.2% 19.6% 18.6% Community Associations $1.1 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $829 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party Escrow
Slide 24: Core Funding Mix
34% 35% 30% 47% 33% 14% 4% 7% 29% 21% 19% 21% 3% Core Funding Mix Commercial Business Banking Consumer In Millions $2,941$1,254$3,612 1At September 30, 2023 2Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated acco
Slide 25: Earnings Per Share Trend - 3Q23
Earnings Per Share Trend - 3Q23 $1.29 $(0.03) $(0.04) $(0.05) $1.17 2Q23 Operating Revenue Provision for Credit Losses Noninterest Expense 3Q23 Change in EPS 25
Slide 26: Net Interest Income Trend
Net Interest Income Trend In Millions $191.9 $238.7 $270.0 $360.2 $473.9 $421.9 3.82% 3.80% 3.56% 3.41% 3.89% 4.50% 1.83% 2.16% 0.36% 0.08% 1.68% 4.93% Net Interest Income Net Interest Margin Avg Federal Funds Rate 2018 2019 2020 2021 2022 3Q23 YTD 26
Slide 27: Credit Trends for Loans
Credit Trends for Loans 2018 2019 2020 2021 2022 3Q23 YTD NPLs/Loans 0.38% 0.50% 0.53% 0.31% 0.10% 0.46% NPAs/Assets 0.30% 0.45% 0.45% 0.23% 0.08% 0.40% Criticized & Classified Loans/Loans 6.40% 5.03% 6.42% 5.52% 4.09% 3.38% ACL/NPLs 2.596 1.638 3.549 5.176 13.719 2.905 ACL/Loans* $0.0 $0.0 $0.0 $0.
Slide 28: Allowance for Credit Losses for Loans
$141.3 $7.7 $(6.9) $142.1 ACL 2Q23 Portfolio Changes Net Charge-offs ACL 3Q23 Allowance for Credit Losses for Loans • New loans and changes in composition of existing loans • Changes in risk ratings, past due status and reserves on individually evaluated loans • Changes in macroeconomic and qualitat
Slide 29: Noninterest Income Trend
Noninterest Income Trend In Millions $43.3 $38.3 $49.2 $54.5 $67.7 $59.2 $8.2 $9.9 $9.7 $10.3 $10.0 $7.6 $11.7 $12.8 $11.7 $15.4 $18.3 $12.2 $6.7 $9.2 $9.5 $11.9 $11.6 $7.4 $8.9 $11.9 $17.0 $22.1 $16.7 $16.6$2.8 $5.4 $6.6 $8.0 $2.6 $(0.5) 16.7% 17.1% 16.8% 15.8% 11.1% 9.3% Wealth Management Deposit
Slide 30: Noninterest Expense Trend
Noninterest Expense Trend In Millions $119.0 $165.5 $167.2 $245.9 $274.2 $255.6 $42.2 $53.7 $57.2 $65.0 $78.5 $67.8 $14.2 $31.1 $50.7 $9.5 $12.5 $13.5 $16.3 $17.6 $12.2 $66.0 $81.3 $92.3 $124.9 $147.0 $124.9 $18.0 $4.2 $22.1 $3.4 50.7% 50.1% 48.7% 49.7% 49.8% 53.6% Other Deposit Costs Occupancy Empl
Slide 31: EFSC Borrowing Capacity
EFSC Borrowing Capacity $4.1 $4.2 $4.3 $0.8 $0.8 $0.9 $2.7 $2.6 $2.5 $0.1 $0.1 $0.1 $0.5 $0.7 $0.8 37% 36% 36% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 1Q23 2Q23 3Q23 In Billions End of Period and Average Loans to Deposits 85% 90
Slide 32: Investment Portfolio Breakout
Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 13% Obligations of states and political subdivisions 42% Agency mortgage- backed securities, 31% Corporate debt securities 6% U.S. Treasury bills 8% TOTAL $2.2 Billion • Effective duration of 5.6
Slide 33: Capital Strategy
Capital Strategy EFSC Capital Strategy: Low Cost - Highly Flexible High Capital Retention Rate Supports Robust Asset Growth Maintain High Quality Capital Stack Maintain 8-9% TCE • Strong earnings profile • Sustainable dividend profile • Organic loan and deposit growth • High quality M&A to enhance c
Slide 34: Capital TBV and Dividends per Share
Capital TBV and Dividends per Share $20.95 $23.76 $25.48 $28.28 $28.67 $31.06 $0.47 $0.62 $0.72 $0.75 $0.90 $0.75 TBV/Share Dividends per Share 2018 2019 2020 2021 2022 3Q23 YTD Return of Capital $30.2 $32.1 $35.1 $86.8 $66.5 $28.0 $10.8 $16.6 $19.8 $26.2 $33.6$19.4 $15.5 $15.3 $60.6 $32.9 Common di
Slide 35: Regulatory Capital
Regulatory Capital 10.0% 14.0% 13.0% 12.9% 14.9% 14.7% 14.2% 14.1% 6.5% 10.0% 9.8% 9.9% 10.9% 11.3% 11.1% 11.2% 9.6% 9.3% 9.1% CET1 Tier 1 Total Risk Based Capital CET1 excluding unrealized losses* Minimum "Well Capitalized" Ratio Optimal Capital Levels 2018 2019 2020 2021 2022 3Q23 8.0% 12.6%12.6%
Slide 36: Balance Sheet Positioned for Growth
61% Adjustable Rate Loans High-quality, Cash- flowing Securities Portfolio with 5.6 Year Average Duration 32.3% Noninterest- Bearing DDA to Total Deposits 8.51% TCE/TA1 7.91% adjusted2 11.2% CET1 9.1% adjusted3 Balance Sheet Positioned for Growth 1Tangible Common Equity/Tangible Assets is a non-GAAP
Slide 37: Appendix
Zz ENTERPRISE inancial Services Corp \ Appendix
Slide 38: Financial Highlights - 3Q23
Financial Highlights - 3Q23* Capital • Tangible Common Equity/Tangible Assets** 8.51%, compared to 8.65% • Tangible Book Value Per Common Share $31.06, compared to $31.23 • CET1 Ratio 11.2%, compared to 11.1% • Quarterly common stock dividend of $0.25 per share in third quarter 2023 • Quarterly pref
Slide 39: Financial Highlights, continued - 3Q23
Financial Highlights, continued - 3Q23* *Comparisons noted below are to the linked quarter unless otherwise noted. ** Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated accounts. Loans & Deposits • Loans $10.6 bil
Slide 40: ESG Highlights
■ Selected by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury to receive $303 million of New Markets Tax Credits allocations since 2011. ■ In 2022 we invested over $1.8 billion in programs designed to promote small business and community devel
Slide 41: 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 42: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Period end (in thousands, except per share data) September 30, 2023 June 30, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Shareholders' equity (GAAP) $ 1,611,880 $ 1,618,233 $ 1,522,263 $ 1,529,116 $ 1,07
Slide 43: Reconciliation of Non-GAAP Financial Measures
Quarter ended Year ended ($ in thousands) September 30, 2023 June 30, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Average shareholder’s equity (GAAP) $ 1,648,605 $ 1,621,337 $ 1,498,759 $ 1,277,153 $ 902,875 Less average preferred stock 71,988 71,988 71,988 8,903 — Less average goodwi
Slide 44: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended Year ended ($ in thousands) September 30, 2023 June 30, 2023 December 31, 2022 Net interest income $ 141,639 $ 140,692 $ 473,903 Noninterest income 12,085 14,290 59,162 Less gain on sale of investment securities — — — Less gain (loss) on sa
Slide 45: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Year-to-date Year ended ($ in thousands) September 30, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Net interest income (GAAP) $ 421,860 $ 473,903 $ 360,194 $ 270,001 $ 238,717 $ 191,905 Tax-equivalent ad
Slide 46: Enterprise Financial Services Corp
gv ENTERPRISE Financial Services Corp \