Enterprise Financial Services Corporation · NASDAQ:EFSC
Enterprise Financial Services — Midwest Super Community Bank Conference (February 2005)
38 slides from Enterprise Financial Services's conference presentation, Feb 28, 2005
Slide 1: Midwest Super Community Bank Conference
Midwest Super Community Bank Conference Kevin Eichner, CEO Frank Sanfilippo, CFO
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS It should be noted that in addition to the historical information contained herein, this presentation contains forward-looking statements which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated fr
Slide 3: Our Business Model
OUR BUSINESS MODEL Enterprise Financial Services Corp is a high growth bank holding company in two lines of business, focused on private businesses and their owner families, currently operating in two urban markets.
Slide 4: Mission
MISSION Our mission is to guide our clients to a lifetime of financial success.
Slide 5: Vision
VISION Our vision is to build an exceptional company that clients love, shareholders prize and associates are proud to serve. We expect Enterprise to be one of the very highest performing growth companies in the industry.
Slide 6: Business Line Strategy
BUSINESS LINE STRATEGY Our two primary lines of business are commercial banking and wealth management. We compete with full product lines in each line of business.
Slide 7: Locating EFSC Within a Peer Group
LOCATING EFSC WITHIN A PEER GROUP Enterprise is an emerging public company most properly benchmarked over time against companies like CoBiz, Private Bancorp, Boston Private and other high performing business banks with strong wealth management franchises.
Slide 8: Corporate History
CORPORATE HISTORY 1988 1997 1998 2000 2001 2002 2003 2004 2005 FOUNDING TRUST CO. FORMED EXIT MERCHANT BANKING BUSINESS. WRITE-OFF CAUSES LOSS YEAR HEAVY RECRUITING OF NEW TALENT SALE OF S.E.KS BRANCHES NATIONAL NASDAQ LISTING OPENED SO. CO. & ST. CHARLES UNITS PUBLIC OTC CO. STATUS ENTERED KANSAS C
Slide 9: Overview: Banking Line of Business
OVERVIEW: BANKING LINE OF BUSINESS $1.1 billion of banking assets growing at 15% CAGR Diverse loan portfolio with business owners we know Sophisticated credit quality management Exceptional core deposit base with 21% DDA and less than 10% brokered deposits Highly efficient, multi-faceted distributio
Slide 10: Overview: Wealth Management Line of Business
OVERVIEW: WEALTH MANAGEMENT LINE OF BUSINESS Enterprise Trust has grown to $1.3 billion in assets in just six years – one of fastest growing Trust companies in U.S. Much more than money management with family office for business owners and other high net worth individuals Non-proprietary, open archi
Slide 11: St. Louis Market
ST. LOUIS MARKET St. Louis MSA is 18th largest in U.S. – Stable, diverse economic base A target-rich environment with nearly 60,000 privately held businesses 80,286 households with investible assets of $1 million or more (Source: Investment News 12/04) EFSC now largest and fastest growing billion do
Slide 12: Kansas City Market
KANSAS CITY MARKET Another rich private company market with over 48,000 businesses 54,316 households with investible assets of at least $1 million Enterprise has grown nearly 4x in just four years to $200 million One of fastest growing banks in the market
Slide 13: Differentiators
DIFFERENTIATORS Our primary marketing differentiators are: Holistic view of personal and business needs Name brand talent with outstanding reputations Exceptional service – top to bottom Sophisticated technology-enabled platform Narrow-cast marketing (e.g., Enterprise University)
Slide 14: Organizational Strategies
ORGANIZATIONAL STRATEGIES Enfranchisement recruiting model Fewer, but better people Strong reward systems tied directly to annual and long-term performance contracts Very invested in assessment, training, and continuous development of talent Supportive, enjoyable culture High performance expectation
Slide 15: Current Position
CURRENT POSITION Largest remaining independent, publicly-held bank holding company headquartered in St. Louis Emerging as top middle-market player in St. Louis and one of the fastest growing in Kansas City market Successfully integrating banking and wealth management for the private business owner R
Slide 16: Strategic Intent: Organic Growth Model Through 2010
STRATEGIC INTENT: ORGANIC GROWTH MODEL THROUGH 2010* Banking Business: 12-15% Annual Growth 3.85 – 4.00% NIM < .25% charge-offs Wealth Management Business: 25% Revenue CAGR 30-35% Earnings CAGR < 7% Average Annual Non-Interest Expense Growth Allowable EPS Growth = 17-22% Thru Plan Horizon * Not inte
Slide 17: Strategic Imperatives
STRATEGIC IMPERATIVES Retain “pure play” market focus Grow share in St. Louis and Kansas City Continue to attract, retain and deploy top talent Drive major gains in productivity Protect core funding advantages Increase company visibility Explore other markets and strategic acquisitions Broaden share
Slide 18: Selected Financials
SELECTED FINANCIALS FRANK SANFILIPPO CFO
Slide 19: Solid Year Over Year Loan Growth
SOLID YEAR OVER YEAR LOAN GROWTH Portfolio loans at year-end in millions of dollars $ 1,100 1,000 900 800 700 600 1,010-1,050 ‘05 Growth = @ 15% 3 year CAGR ‘02 -‘05 = @ 15% ‘01 ‘02 ‘03 ‘04 ‘05 Expectation
Slide 20: Diversified Portfolio Mix
DIVERSIFIED PORTFOLIO MIX ‘01 ‘02 ‘03 ‘04 C&I 27% 25% 27% 28% COMMERCIAL REAL ESTATE 28% 28% 33% 37% CONSTRUCTION 21% 20% 17% 14% RESIDENTIAL 27% 28% 19% 17% CONSUMER 5% 5% 4% 4% HELD FOR SALE (8%) (6%) - - 100% 100% 100% 100%
Slide 21: Excellent Core Deposit Growth
EXCELLENT CORE DEPOSIT GROWTH Year-end deposits in millions of dollars $ 1,200 1,100 1,000 900 800 700 600 1,050-1,125 ‘05 Growth = @ 18% 3 year CAGR ‘02-‘05 = @ 16% ‘01 ‘02 ‘03 ‘04 ‘05 Expectation Note: Core deposits are 90% or more of totals shown
Slide 22: An Enviable Deposit Mix
AN ENVIABLE DEPOSIT MIX ‘01 ‘02 ‘03 ‘04 DDA 15% 18% 20% 21% NOW/MMA/ 53% 56% 55% 54% SAVINGS TIME DEPOSITS 26% 21% 20% 18% BROKERED/ 6% 5% 5% 7% NON-CORE TOTAL 100% 100% 100% 100%
Slide 23: Rising Net Interest Income
RISING NET INTEREST INCOME In millions of dollars $ 50.0 45.0 40.0 35.0 30.0 25.0 20.0 28.8 30.9 32.7 36.7 42.5-43.5 ‘05 Increase = @17% 3 year CAGR ‘02-’05 = @12% ‘01 ‘02 ‘03 ‘04 ‘05 Expectation
Slide 24: Strong Net Interest Margins
STRONG NET INTEREST MARGINS* % 4.90 4.70 4.50 4.30 4.12% 4.01% 4.00 - 4.05% 4.10 4.00% 3.84% 3.90 3.70 3.50 ‘01 ‘02 ‘03 ‘04 ‘05 Expectation * Tax-equivalent
Slide 25: Outstanding Asset Quality
OUTSTANDING ASSET QUALITY % 1.60 1.35% 1.30% 1.40 1.27% 1.21% 1.20 1.00 0.80 0.62% 0.57% 0.60 0.40 0.49% 0.20% 0.20% 0.20 0.22% 0.00 0.14% 0.13% ‘01 ‘02 ‘03 ‘04 Allowance for loan losses to total loans Non-performing loans to loans Net charge-offs to avg. loans ‘05 expectations consistent with recen
Slide 26: A High Growth Wealth Management Business
A HIGH GROWTH WEALTH MANAGEMENT BUSINESS $ Gross revenue in millions of dollars 7.0 6.4-6.8 6.0 5.3 5.0 4.6 4.0 3.2 ‘05 Growth = @ 26% 3.0 3 year CAGR ‘02-’05 = @ 28% 2.0 2.0 ‘01 ‘02 ‘03 ‘04 ‘05 Expectation
Slide 27: Leveraging Wealth Management Profitability
LEVERAGING WEALTH MANAGEMENT PROFITABILITY $ In millions of dollars of pre-tax earnings 1.50 0.95 – 1.05 1.00 0.70 0.50 (0.04) 0.00 ‘01 ‘03 ‘05 (0.50) (0.76) Expectation (1.00) (1.20) ‘05 Increase = @ 47% 3 year CAGR ‘02-’05 = N/M (1.50)
Slide 28: Effective Non-Interest Expense Control
EFFECTIVE NON-INTEREST EXPENSE CONTROL $ In millions of dollars ‘05 Increase = @ 8% 3 year CAGR ‘02-’05 = @5% 34.0 31.4 – 31.9 32.0 30.0 29.3 27.4 28.2 28.0 26.0 24.8 24.0 22.0 20.0 ‘01 ‘02 ‘03 ‘04 ‘05 Expectation
Slide 29: Improving Efficiency
IMPROVING EFFICIENCY Ratio of non-interest expenses to total assets % 3.40 3.34% 3.34% 3.25% 3.20 3.00 2.91% 2.83% 2.80 2.60 2.40 2.20 2.00 ‘01 ‘02 ‘03 ‘04 ‘05 Expectation
Slide 30: Productivity Rising
PRODUCTIVITY RISING Return On Comp $* % 49% 50 44% 40 37% 31% 30 20 10 0 ‘02 ‘03 ‘04 ‘05 Expectation *Net income ÷ total compensation
Slide 31: Net Income
NET INCOME In millions of dollars $ 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 2.7* 5.0 6.9 8.2 10.0 – 10.5 ‘05 Increase = @ 24% 3 year CAGR ‘02-’05 = @ 27% ‘01 ‘02 ‘03 ‘04 ‘05 Proforma* Expectation *GAAP loss of $2.5 million. Proforma excludes loss from Merchant Bank investments.
Slide 32: Fully Diluted EPS
FULLY DILUTED EPS $ In dollars 1.00 0.95-1.00 0.90 0.82 0.80 0.70 0.70 0.60 0.52 0.50 0.40 0.29* ‘05 Increase = @ 18% 0.30 3 year CAGR ‘02 -’05 = @ 23% 0.20 0.10 - ‘01 ‘02 ‘03 ‘04 ‘05 Proforma* Expectation *GAAP EPS of $(0.28). Proforma excludes Merchant Banking losses.
Slide 33: Capital Ratios
CAPITAL RATIOS 12/31/03 12/31/04 Tier 1 Risk-based 9.78% 9.94% Total Risk-based 11.03% 11.19% Leverage Ratio 8.68% 8.44% Equity to Assets 7.20% 6.86% Regulatory Capital Events in 2003 and 2004: Issued $5 million of Trust PFD 2Q ‘04 Refinanced $11 million of Trust PFD in 4Q ‘04 No additional equity c
Slide 34: Summary
SUMMARY KEVIN EICHNER CEO
Slide 35: Summary
SUMMARY Positioning EFSC stock as high growth, high performing winner in the small cap financial services space Compelling pure-play strategy well executed by experienced and passionate management team Strong competitive position in two urban markets with excellent business and high net worth client
Slide 36: Summary (continued)
SUMMARY (continued) Achieving significant lift in EPS driven by: Strong core banking growth Wealth management net fee income Non-interest expense control Infrastructure and talent in place to support much larger business model Driving excellent shareholder returns with the prospect of continued long
Slide 37: Stock Price
STOCK PRICE $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 New Management Team Named 116.2% Increase Since 2002 32% Increase in 2004 National NASDAQ Listing 7/1/02 12/31/02 12/31/03 12/31/04
Slide 38: Discussion
DISCUSSION
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