Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Q1 2023 Earnings Presentation
31 slides from Enterprise Financial Services's earnings presentation, Apr 24, 2023
Slide 1: Enterprise Financial Services Corp 2023 First Quarter Earnings Webcast
Enterprise Financial Services Corp 2023 First Quarter Earnings Webcast Exhibit 99.2
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 - 1Q23
Financial Highlights - 1Q23* Capital • Tangible Common Equity/Tangible Assets** 8.81%, compared to 8.43% • Tangible Book Value Per Common Share $30.55, compared to $28.67 • CET1 Ratio 11.2%, compared to 11.1% • Quarterly common stock dividend of $0.25 per share in first quarter 2023 • Quarterly pref
Slide 4: Financial Highlights, continued - 1Q23
Financial Highlights, continued - 1Q23* *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 $10.0 bil
Slide 5: Areas of Focus
Areas of Focus Organic Loan and Deposit Growth Disciplined Loan and Deposit Pricing Maintain Strong Asset Quality Maintain a Strong Balance Sheet Opportunistic Talent Additions 5
Slide 6: Total Loan Trends
$9,056 $9,269 $9,355 $9,737 $10,012 1Q22 2Q22 3Q22 4Q22 1Q23 In Millions 11% Total Loan Growth Total Loan Trends PPP $49PPP $134 PPP $13 6
Slide 7: Loan Details - LTM
Loan Details - LTM 1Q23 1Q22 LTM Change C&I $ 2,006 $ 1,438 $ 568 CRE Investor Owned 2,240 1,983 257 CRE Owner Occupied 1,174 1,138 36 SBA loans* 1,316 1,250 66 Sponsor Finance* 678 641 37 Life Insurance Premium Financing* 860 696 164 Tax Credits* 547 518 29 Residential Real Estate 349 410 (61) Cons
Slide 8: Loan Details - QTR
Loan Details - QTR 1Q23 4Q22 QTR Change C&I $ 2,006 $ 1,905 $ 101 CRE Investor Owned 2,240 2,176 64 CRE Owner Occupied 1,174 1,174 — SBA loans* 1,316 1,312 4 Sponsor Finance* 678 635 43 Life Insurance Premium Financing* 860 817 43 Tax Credits* 547 560 (13) Residential Real Estate 349 380 (31) Constr
Slide 9: Total Loans By Region
Total Loans By Region Specialty Lending $3,041 $3,382 $3,503 1Q22 4Q22 1Q23 In Millions Midwest $2,930 $3,214 $3,267 1Q22 4Q22 1Q23 Southwest $1,126 $1,242 $1,327 1Q22 4Q22 1Q23 Note: Excludes PPP and Other loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX
Slide 10: Deposit Details - LTM
Deposit Details - LTM 1Q23 1Q22 LTM Change Noninterest-bearing demand accounts $ 4,192 $ 4,881 $ (689) Interest-bearing demand accounts 2,396 2,547 (151) Money market accounts 2,960 2,795 165 Savings accounts 713 884 (171) Certificates of deposit: Brokered 370 129 241 Other 524 468 56 Total deposits
Slide 11: Deposit Details - QTR
Deposit Details - QTR 1Q23 4Q22 QTR Change Noninterest-bearing demand accounts $ 4,192 $ 4,643 $ (451) Interest-bearing demand accounts 2,396 2,256 140 Money market accounts 2,960 2,655 305 Savings accounts 713 744 (31) Certificates of deposit: Brokered 370 119 251 Other 524 412 112 Total Deposits $
Slide 12: Total Deposits By Region
Total Deposits By Region Specialty Deposits $2,495 $2,524 $2,831 1Q22 4Q22 1Q23 In Millions Midwest* $5,583 $4,940 $5,072 1Q22 4Q22 1Q23 Southwest $1,952 $1,845 $1,835 1Q22 4Q22 1Q23 West $1,674 $1,520 $1,417 1Q22 4Q22 1Q23 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, N
Slide 13: Specialty Deposits
Specialty Deposits 39.5% 23.8% 19.2% 2.7% 14.8% Community Associations $1.1 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $673 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party
Slide 14: Core Funding Mix
8% 33% 21% 22% 14% 2% Core Funding Mix Commercial Business Banking Consumer In Millions $2,849$1,343$3,528 Cost of Funds1 Commercial Business Banking Consumer Specialty Brokered Total 1.33% 0.41% 0.84% 1.03% 3.24% 1At March 31, 2023 2Excludes insured accounts, collateralized accounts, accounts that
Slide 15: Earnings Per Share Trend - 1Q23
Earnings Per Share Trend - 1Q23 $1.58 $0.01 $(0.05) $(0.08) $1.46 4Q22 Operating Revenue Provision for Credit Losses Noninterest Expense 1Q23 Change in EPS 15
Slide 16: Net Interest Income Trend
$138.8 $139.5 $101.2 $109.6 $124.3 3.28% 3.55% 4.10% 4.66% 4.71% 0.12% 0.76% 2.20% 3.65% 4.52% Net Interest Income PPP Income Net Interest Margin Avg Fed Funds Rate 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income Trend In Millions 38% NII Growth PPP Income $0.5 PPP Income $2.9 PPP Income $1.6 16
Slide 17: Net Interest Margin
Net Interest Margin 4.34% 4.51% 5.10% 5.87% 6.33% 2.31% 2.51% 2.65% 2.91% 3.03% 3.45% 3.76% 4.47% 5.25% 5.69% Earning asset yield Securities yield Loan yield 1Q22 2Q22 3Q22 4Q22 1Q23 0.54% 0.94% 1.56% 0.10% 0.13% 0.31% 0.53% 0.92% 0.30% 0.37% 0.67% 1.07% 1.72% Interest-bearing deposit rate Total cos
Slide 18: Credit Trends
Credit Trends 7 (1) 2 9 (1) 1Q22 2Q22 3Q22 4Q22 1Q23 $176 $298 $122 $388 $277 $(138) $(85) $(36) $(6) $(2) 39.9% 43.9% 42.5% 41.0% 42.4% Organic Loans PPP Loans Avg Line Draw % 1Q22 2Q22 3Q22 4Q22 1Q23 1Q23 4Q22 1Q22 NPLs/Loans 0.12% 0.10% 0.23% NPAs/Assets 0.09% 0.08% 0.17% ACL/NPLs 1155.2% 1371.9%
Slide 19: Allowance for Credit Losses for Loans
$136.9 $1.1 $0.3 $138.3 ACL 4Q22 Portfolio Changes Net Recoveries ACL 1Q23 Allowance for Credit Losses for Loans In Millions • 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
Slide 20: Noninterest Income Trend
Noninterest Income Trend Other Fee Income DetailFee Income In Millions $9.5 $18.6 $14.2 $16.9 $16.9 $2.6 $2.5 $2.4 $2.4 $2.5 $4.2 $4.8 $5.0 $4.5 $4.1 $3.0 $3.5 $2.7 $2.3 $2.3 $6.2 $2.2 $3.0 $5.3 $6.1 $2.6 $1.2 $(3.6) $2.4 $1.8 15.6% 11.5% 7.1% 10.8% 10.8% Wealth Management Deposit Services Charge Ca
Slide 21: Operating Expenses Trend
Operating Expenses Trend Other Operating Expenses DetailOperating Expenses In Millions $62.8 $65.4 $68.8 $77.1 $81.0 $22.4 $25.1 $27.3 $34.7 $34.4 $4.6 $4.3 $4.5 $4.2 $4.1 $35.8 $36.0 $37.0 $38.2 $42.5 50.6% 51.0% 49.8% 48.1% 50.5% Other Occupancy Employee compensation and benefits Merger-related ex
Slide 22: Capital
Capital Tangible Common Equity/Tangible Assets* 7.62% 7.80% 7.86% 8.43% 8.81% Tangible Common Equity/Tangible Assets 1Q22 2Q22 3Q22 4Q22 1Q23 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. Regulatory Capital 10.0% 14.4% 14.2% 14.2% 14.2% 14.3% 6.5% 11.0% 10.9% 11.0% 11.1% 11.2% CET1 Tier
Slide 23: Investment Portfolio
Investment Portfolio Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 12% Obligations of states and political subdivisions 43% Agency mortgage- backed securities, 31% Corporate debt securities 5% U.S. Treasury bills 9% TOTAL $2.3 Billion • Effe
Slide 24: Liquidity
Liquidity EFSC Borrowing Capacity $3.7 $3.7 $4.1 $0.8 $0.8 $0.8 $1.4 $1.4 $2.7$0.1 $0.1 $0.1 $1.4 $1.4 $0.5 34% 34% 37% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 3Q22 4Q22 1Q23 In Billions End of Period and Average Loans to Deposi
Slide 25: Appendix First Quarter 2023 Earnings Webcast
Appendix First Quarter 2023 Earnings Webcast
Slide 26: Office CRE (Investor-Owned)
Office CRE (Investor-0wned) Total $483.6 Million Midwest 56.7% Southwest 25.2% West 12.4% Specialty 5.7% Office CRE Loans by Location Real Estate/ Rental/Leasing 85.2% Information 1.8% Health Care and Social Assistance 3.5% Professional Services 1.8% Retail Trade 1.7% Finance and Insurance 1.2% Othe
Slide 27: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common e
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,592,820 $ 1,522,263 $ 1,446,218 $ 1,447,412 $ 1,47
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 CALCULATION OF PRE-PROVISION NET REVENUE Net interest income $ 139,529 $ 138,835 $ 124,290 $ 109,613 $ 101,165 Noninterest income 16,898 16,873 9,454 14,194 1
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 CORE EFFICIENCY RATIO Net interest income (GAAP) $ 139,529 $ 138,835 $ 124,290 $ 109,613 $ 101,165 Tax-equivalent adjustment 2,041 1,983 1,854 1,699 1,506 Net
Slide 31: Q & A First Quarter 2023 Earnings Webcast
Q & A First Quarter 2023 Earnings Webcast
Enterprise Financial Services — Q1 2023 Earnings Presentation on 6ix