Third Quarter Results
- Net income of $50.6 million, or $1.32 per diluted common
share, compared to $1.19 in the linked quarter and $1.17 in the
prior year quarter
- Net interest margin of 4.17%, quarterly decrease of 2
basis points
- Net interest income of $143.5 million, quarterly increase of
$2.9 million
- Total loans of $11.1 billion, quarterly increase of $79.9
million
- Total deposits of $12.5 billion, quarterly increase of
$182.9 million
- Return on Average Assets (“ROAA”) of 1.36%, compared to
1.25% and 1.26% in the linked and prior year quarters,
respectively
- Return on Average Tangible Common Equity (“ROATCE”)1 of
14.55%, compared to 13.77% and 14.49% in the linked and prior year
quarters, respectively
- Tangible common equity to tangible assets1 of 9.50%, an
increase of 32 basis points and 99 basis points from the linked and
prior year quarters, respectively
- Tangible book value per share1 of $37.26, annualized
quarterly increase of 25%
- Repurchased 195,114 shares and increased quarterly dividend
$0.01 to $0.28 per common share for the fourth quarter
2024
Jim Lally, President and Chief Executive Officer of Enterprise
Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”),
said today upon the release of EFSC’s third quarter earnings, “We
are proud of our third quarter results, with a stable net interest
margin, expansion in net interest income and an 11% increase in
diluted earnings per share over the linked quarter. Our consistent
return profile increased tangible book value per share 25% on an
annualized basis from the linked quarter, and 20% over the prior
year’s third quarter. With the strength of our balance sheet and
capital position as a foundation, I believe we are well positioned
to continue executing on the opportunities within our markets.”
Highlights
- Earnings - Net income in the third quarter 2024 was
$50.6 million, an increase of $5.1 million and $5.9 million
compared to the linked and prior year quarters, respectively.
Earnings per diluted common share for the third quarter 2024 was
$1.32, compared to $1.19 and $1.17 for the linked and prior year
quarters, respectively. Adjusted diluted earnings per common share1
was $1.29 for the third quarter 2024, compared to $1.21 and $1.17
for the linked and prior year quarters, respectively.
- Pre-provision net revenue (“PPNR”)1 - PPNR of $65.1
million in the third quarter 2024 increased $1.8 million from the
linked quarter and was relatively stable with the prior year
quarter. The increase from the linked quarter was primarily due to
higher noninterest income from sales of other real estate owned,
and higher net interest income that benefited from an increase in
average earning assets. The increase in operating revenue was
partially offset by an increase in noninterest expense, primarily
variable deposit services costs and employee compensation and
benefits.
- Net interest income and net interest margin (“NIM”) -
Net interest income of $143.5 million for the third quarter 2024
increased $2.9 million and $1.8 million from the linked and prior
year quarters, respectively. Compared to the linked quarter, net
interest income for the third quarter 2024 increased primarily due
to higher interest-earning asset balances and an additional day in
the quarter. NIM was 4.17% for the third quarter 2024, compared to
4.19% and 4.33% for the linked and prior year quarters,
respectively. The total cost of deposits of 2.18% for the third
quarter 2024 increased 2 basis points and 34 basis points from the
linked and prior year quarters, respectively.
- Noninterest income - Noninterest income of $21.4 million
for the third quarter 2024 increased $5.9 million and $9.3 million
from the linked and prior year quarters, respectively. The increase
from the linked and prior year quarters was primarily due to an
increase in tax credit income, a net gain on the sale of other real
estate owned and an increase in income on community development
investments.
- Noninterest expense - Noninterest expense of $98.0
million for the third quarter 2024 increased $4.0 million and $9.4
million from the linked and prior year quarters, respectively. The
increase from the linked and prior year quarters was primarily
driven by higher employee compensation and variable deposit
servicing costs. The Company continues to have success in
recruiting new relationship managers and in deposit generation from
existing relationships, both of which have contributed to an
increase in average deposit balances. The increase from the prior
year quarter was also affected by expenses related to the core
system conversion.
- Loans - Loans totaled $11.1 billion at September 30,
2024, an increase of $79.9 million from the linked quarter and an
increase of $463.1 million from the prior year quarter. Average
loans totaled $11.0 billion for both the current and linked quarter
and $10.5 billion in the prior year quarter.
- Asset quality - The allowance for credit losses to total
loans was 1.26% at September 30, 2024, compared to 1.27% at June
30, 2024 and 1.34% at September 30, 2023. The ratio of
nonperforming assets to total assets was 0.22% at September 30,
2024, compared to 0.33% and 0.40% at June 30, 2024 and September
30, 2023, respectively. The provision for credit losses recorded in
the third quarter 2024 was $4.1 million, compared to $4.8 million
and $8.0 million for the linked and prior year quarters,
respectively.
- Deposits - Deposits totaled $12.5 billion at September
30, 2024, an increase of $182.9 million from the linked quarter.
Excluding brokered certificates of deposits, deposits increased
$196.9 million. Average deposits were $12.5 billion, $12.3 billion
and $11.9 billion for the current, linked and prior year quarters,
respectively. At September 30, 2024, noninterest-bearing deposit
accounts totaled $3.9 billion, or 31.6% of total deposits, and the
loan to deposit ratio was 88.9%.
- Liquidity - The total available on- and
off-balance-sheet liquidity was approximately $5.8 billion at
September 30, 2024. On-balance-sheet liquidity consisted of cash of
$426.4 million and $1.4 billion in unpledged investment securities
at September 30, 2024. Off-balance-sheet liquidity consisted of
$1.2 billion available through the Federal Home Loan Bank, $2.6
billion available through the Federal Reserve and $140.0 million
through correspondent bank lines. The Company also has an unused
$25.0 million revolving line of credit and maintains a shelf
registration allowing for the issuance of various forms of equity
and debt securities.
- Capital - Total shareholders’ equity was $1.8 billion
and the tangible common equity to tangible assets ratio2 was 9.50%
at September 30, 2024, compared to 9.18% at June 30, 2024.
Enterprise Bank & Trust remains “well-capitalized,” with a
common equity tier 1 ratio of 12.5% and a total risk-based capital
ratio of 13.6% at September 30, 2024. The Company’s common equity
tier 1 ratio and total risk-based capital ratio were 11.9% and
14.8%, respectively, at September 30, 2024.
The Company’s board of directors approved a quarterly dividend
of $0.28 per common share, payable on December 31, 2024 to
shareholders of record as of December 16, 2024. The board of
directors also declared a cash dividend of $12.50 per share of
Series A Preferred Stock (or $0.3125 per depositary share)
representing a 5% per annum rate for the period commencing (and
including) September 15, 2024 to (but excluding) December 15, 2024.
The dividend will be payable on December 15, 2024 and will be paid
on December 16, 2024 to holders of record of Series A Preferred
Stock as of November 29, 2024.
___________________
1 ROATCE, tangible common equity to
tangible assets, tangible book value per share, adjusted diluted
earnings per share and PPNR are non-GAAP measures. Please refer to
discussion and reconciliation of these measures in the accompanying
financial tables.
2 Tangible common equity to tangible
assets ratio is a non-GAAP measure. Please refer to discussion and
reconciliation of this measure in the accompanying financial
tables.
Net Interest Income and NIM
Average Balance Sheets
The following table presents, for the periods indicated, certain
information related to the average interest-earning assets and
interest-bearing liabilities, as well as the corresponding average
interest rates earned and paid, all on a tax-equivalent basis.
Quarter ended
September 30, 2024
June 30, 2024
September 30, 2023
($ in thousands)
Average Balance
Interest Income/ Expense
Average Yield/ Rate
Average Balance
Interest Income/ Expense
Average Yield/ Rate
Average Balance
Interest Income/ Expense
Average Yield/ Rate
Assets
Interest-earning assets:
Loans1, 2
$
10,971,575
$
191,638
6.95
%
$
10,962,488
$
189,346
6.95
%
$
10,521,966
$
180,382
6.80
%
Securities2
2,503,124
21,404
3.40
2,396,519
19,956
3.35
2,302,850
18,076
3.11
Interest-earning deposits
402,932
5,348
5.28
325,452
4,389
5.42
335,771
4,509
5.33
Total interest-earning assets
13,877,631
218,390
6.26
13,684,459
213,691
6.28
13,160,587
202,967
6.12
Noninterest-earning assets
971,824
961,922
908,273
Total assets
$
14,849,455
$
14,646,381
$
14,068,860
Liabilities and Shareholders’
Equity
Interest-bearing liabilities:
Interest-bearing demand accounts
$
3,018,309
$
20,002
2.64
%
$
2,950,827
$
18,801
2.56
%
$
2,672,084
$
13,701
2.03
%
Money market accounts
3,551,492
33,493
3.75
3,434,712
31,926
3.74
3,079,221
26,427
3.40
Savings accounts
561,466
345
0.24
573,115
335
0.24
646,187
250
0.15
Certificates of deposit
1,368,339
14,928
4.34
1,412,263
15,312
4.36
1,519,119
14,976
3.91
Total interest-bearing deposits
8,499,606
68,768
3.22
8,370,917
66,374
3.19
7,916,611
55,354
2.77
Subordinated debentures and notes
156,329
2,695
6.86
156,188
2,684
6.91
155,769
2,466
6.28
FHLB advances
4,565
59
5.14
40,308
561
5.60
10,326
141
5.42
Securities sold under agreements to
repurchase
140,255
1,217
3.45
158,969
1,401
3.54
146,893
969
2.61
Other borrowings
36,226
96
1.05
36,203
95
1.06
50,571
337
2.66
Total interest-bearing liabilities
8,836,981
72,835
3.28
8,762,585
71,115
3.26
8,280,170
59,267
2.84
Noninterest-bearing liabilities:
Demand deposits
4,046,480
3,973,336
4,005,923
Other liabilities
161,625
162,220
134,162
Total liabilities
13,045,086
12,898,141
12,420,255
Shareholders' equity
1,804,369
1,748,240
1,648,605
Total liabilities and shareholders'
equity
$
14,849,455
$
14,646,381
$
14,068,860
Total net interest income
$
145,555
$
142,576
$
143,700
Net interest margin
4.17
%
4.19
%
4.33
%
1 Average balances include nonaccrual
loans. Interest income includes net loan fees of $2.6 million, $2.2
million, and $3.3 million for the three months ended September 30,
2024, June 30, 2024, and September 30, 2023, respectively.
2 Non-taxable income is presented on a
fully tax-equivalent basis using a tax rate of approximately 25%.
The tax-equivalent adjustments were $2.1 million for each of the
three months ended September 30, 2024, June 30, 2024, and September
30, 2023, respectively.
Net interest income of $143.5 million for the third quarter 2024
increased $2.9 million and $1.8 million from the linked and prior
year quarters, respectively. Net interest income on a tax
equivalent basis was $145.6 million, $142.6 million and $143.7
million for the current, linked and prior year quarters,
respectively. The increase from the linked and prior quarters
reflects the benefit of higher yields combined with organic growth.
In late September 2024 the Federal Reserve reduced the federal
funds target rate by 50 basis points. In response, since the
Company maintains an asset-sensitive balance sheet, deposit pricing
has been adjusted to partially mitigate the impact on income from
the repricing of variable rate loans.
Interest income increased $4.7 million during the third quarter
2024 due to increases in all interest earning categories, including
loans, securities and interest earning cash accounts. Interest
income increased primarily due to an increase in average balances
compared to the linked quarter. Continued success in deposit
generation has increased liquidity, which has been primarily
deployed into the securities portfolio.
The average interest rate of new loan originations in the third
quarter 2024 was 7.84%, a decrease of 23 basis points from the
linked quarter. Investment purchases in the third quarter 2024 had
a weighted average, tax equivalent yield of 4.97%.
Interest expense increased $1.7 million in the third quarter
2024 primarily due to an increase in deposit interest expense,
partially offset by a decline in interest expense on borrowings.
The average cost of interest-bearing deposits was 3.22%, an
increase of 3 basis points compared to the linked quarter. The
total cost of deposits, including noninterest-bearing demand
accounts, was 2.18% during the third quarter 2024, compared to
2.16% in the linked quarter.
NIM, on a tax equivalent basis, was 4.17% in the third quarter
2024, a decrease of 2 basis points from the linked quarter and a
decrease of 16 basis points from the prior year quarter. For the
month of September 2024, the loan portfolio yield was 6.90% and the
cost of total deposits was 2.18%.
Investments
At
September 30, 2024
June 30, 2024
September 30, 2023
($ in thousands)
Carrying Value
Net Unrealized Loss
Carrying Value
Net Unrealized Loss
Carrying Value
Net Unrealized Loss
Available-for-sale (AFS)
$
1,786,793
$
(122,158
)
$
1,615,930
$
(172,734
)
$
1,487,104
$
(235,013
)
Held-to-maturity (HTM)
851,647
(46,351
)
772,648
(69,442
)
730,655
(108,780
)
Total
$
2,638,440
$
(168,509
)
$
2,388,578
$
(242,176
)
$
2,217,759
$
(343,793
)
Investment securities totaled $2.6 billion at September 30,
2024, an increase of $249.9 million from the linked quarter. The
tangible common equity to tangible assets ratio adjusted for
unrealized losses on held-to-maturity securities3 was 9.26% at
September 30, 2024, compared to 8.82% at June 30, 2024.
______________________
3 The tangible common equity to tangible
assets ratio adjusted for unrealized losses on held-to-maturity
securities is a non-GAAP measure. Refer to discussion and
reconciliation of this measure in the accompanying financial
tables.
Loans
The following table presents total loans for the most recent
five quarters:
At
($ in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
C&I
$
2,145,286
$
2,107,097
$
2,263,817
$
2,186,203
$
2,020,303
CRE investor owned
2,346,575
2,308,926
2,280,990
2,291,660
2,260,220
CRE owner occupied
1,322,714
1,313,742
1,279,929
1,262,264
1,255,885
SBA loans*
1,272,679
1,269,145
1,274,780
1,281,632
1,309,497
Sponsor finance*
819,079
865,883
865,180
872,264
888,000
Life insurance premium financing*
1,030,273
996,154
1,003,597
956,162
928,486
Tax credits*
724,441
738,249
718,383
734,594
683,580
Residential real estate
346,460
339,889
354,615
359,957
364,618
Construction and land development
796,586
791,780
726,742
670,567
639,555
Other
275,799
269,142
260,459
268,815
266,676
Total loans
$
11,079,892
$
11,000,007
$
11,028,492
$
10,884,118
$
10,616,820
Quarterly loan yield
6.95
%
6.95
%
6.87
%
6.87
%
6.80
%
Variable interest rate loans to total
loans
61
%
61
%
61
%
61
%
61
%
*Specialty loan category
Loans totaled $11.1 billion at September 30, 2024, an increase
of $79.9 million compared to the linked quarter. During the current
quarter, C&I loans and CRE loans increased $38.2 million and
$46.6 million, respectively. Average line utilization was
approximately 44% for the quarter ended September 30, 2024,
compared to 46% and 41% for the linked and prior year quarters,
respectively.
Asset Quality
The following table presents the categories of nonperforming
assets and related ratios for the most recent five quarters:
At
($ in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Nonperforming loans*
$
28,376
$
39,384
$
35,642
$
43,728
$
48,932
Other
4,516
8,746
8,466
5,736
6,933
Nonperforming assets*
$
32,892
$
48,130
$
44,108
$
49,464
$
55,865
Nonperforming loans to total loans
0.26
%
0.36
%
0.32
%
0.40
%
0.46
%
Nonperforming assets to total assets
0.22
%
0.33
%
0.30
%
0.34
%
0.40
%
Allowance for credit losses
$
139,778
$
139,464
$
135,498
$
134,771
$
142,133
Allowance for credit losses to total
loans
1.26
%
1.27
%
1.23
%
1.24
%
1.34
%
Quarterly net charge-offs
$
3,850
$
605
$
5,864
$
28,479
$
6,856
*Guaranteed balances excluded
$
11,899
$
12,933
$
9,630
$
10,682
$
5,974
Nonperforming assets decreased $15.2 million and $23.0 million
from the linked and prior year quarters, respectively. The decrease
in nonperforming assets in the current quarter was primarily
related to the sale of other real estate owned, the positive
resolution on several loans, principal repayments and charge-offs
in the quarter. Annualized net charge-offs totaled 14 basis points
of average loans in the third quarter 2024, compared to 2 basis
points in the linked quarter and 26 basis point in the prior year
quarter.
The provision for credit losses totaled $4.1 million in the
third quarter 2024, compared to $4.8 million and $8.0 million in
the linked and prior year quarters, respectively. The provision for
credit losses in the third quarter 2024 was primarily related to
charge-offs and updates to qualitative factors used in the
allowance calculation.
Deposits
The following table presents deposits broken out by type for the
most recent five quarters:
At
($ in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Noninterest-bearing demand accounts
$
3,934,245
$
3,928,308
$
3,805,334
$
3,958,743
$
3,852,486
Interest-bearing demand accounts
3,048,981
2,951,899
2,956,282
2,950,259
2,749,598
Money market and savings accounts
4,121,543
4,039,626
4,006,702
3,994,455
3,837,145
Brokered certificates of deposit
480,934
494,870
659,005
482,759
695,551
Other certificates of deposit
879,619
867,680
826,378
790,155
775,127
Total deposit portfolio
$
12,465,322
$
12,282,383
$
12,253,701
$
12,176,371
$
11,909,907
Noninterest-bearing deposits to total
deposits
31.6
%
32.0
%
31.1
%
32.5
%
32.3
%
Quarterly cost of deposits
2.18
%
2.16
%
2.13
%
2.03
%
1.84
%
Total deposits at September 30, 2024 were $12.5 billion, an
increase of $182.9 million and $555.4 million from the linked and
prior year quarters, respectively. Excluding brokered certificates
of deposits, total deposits increased $196.9 million and $770.0
million, from the linked and prior year quarters, respectively.
Reciprocal deposits, which are placed through third party programs
to provide FDIC insurance on larger deposit relationships, totaled
$1.2 billion at both September 30, 2024 and June 30, 2024.
Total estimated insured deposits,4 which includes collateralized
deposits, reciprocal accounts and accounts that qualify for
pass-through insurance, totaled $8.8 billion, or 70% of total
deposits, at September 30, 2024 compared to $8.7 billion, or 71% of
total deposits, at June 30, 2024.
__________________
4 Estimated insured deposits is a non-GAAP
measure. Refer to discussion and reconciliation of this measure in
the accompanying financial tables.
Noninterest Income
The following table presents a comparative summary of the major
components of noninterest income for the periods indicated:
Linked quarter comparison
Prior year comparison
Quarter ended
Quarter ended
($ in thousands)
September 30, 2024
June 30, 2024
Increase (decrease)
September 30, 2023
Increase (decrease)
Deposit service charges
$
4,649
$
4,542
$
107
2
%
$
4,187
$
462
11
%
Wealth management revenue
2,599
2,590
9
—
%
2,614
(15
)
(1
)%
Card services revenue
2,573
2,497
76
3
%
2,560
13
1
%
Tax credit income (loss)
3,252
1,874
1,378
74
%
(2,673
)
5,925
222
%
Other income
8,347
3,991
4,356
109
%
5,397
2,950
55
%
Total noninterest income
$
21,420
$
15,494
$
5,926
38
%
$
12,085
$
9,335
77
%
Total noninterest income was $21.4 million for the third quarter
2024, an increase of $5.9 million and $9.3 million from the linked
and prior year quarter, respectively. The increase from the linked
and prior year quarters was primarily due to an increase in tax
credit income from a positive change in credits carried at fair
value, and a net gain on the sale of other real estate that is
included in Other income. Tax credit income varies based on
transaction volumes and fair value changes on credits carried at
fair value.
The following table presents a comparative summary of the major
components of other income for the periods indicated:
Linked quarter comparison
Prior year comparison
Quarter ended
Quarter ended
($ in thousands)
September 30, 2024
June 30, 2024
Increase (decrease)
September 30, 2023
Increase (decrease)
Gain on sales of other real estate
owned
$
3,159
$
—
$
3,159
100
%
$
—
$
3,159
100
%
BOLI
1,123
855
268
31
%
822
301
37
%
Community development investments
1,177
381
796
209
%
338
839
248
%
Private equity fund distributions
614
411
203
49
%
181
433
239
%
Servicing fees
539
594
(55
)
(9
)%
701
(162
)
(23
)%
Swap fees
17
217
(200
)
(92
)%
54
(37
)
(69
)%
Gain on SBA loan sales
—
—
—
—
%
1,514
(1,514
)
(100
)%
Miscellaneous income
1,718
1,533
185
12
%
1,787
(69
)
(4
)%
Total other income
$
8,347
$
3,991
$
4,356
109
%
$
5,397
$
2,950
55
%
The increase in other income from the linked and prior year
quarters was primarily driven by a $3.2 million net gain on the
sale of other real estate in the third quarter 2024 and higher
community development income. Community development income and
private equity fund distributions are not consistent sources of
income and fluctuate based on distributions from the underlying
funds. The increase from the prior year quarter was partially
offset by a decline in the gain on SBA loan sales that were
transacted in the prior year.
Noninterest Expense
The following table presents a comparative summary of the major
components of noninterest expense for the periods indicated:
Linked quarter comparison
Prior year comparison
Quarter ended
Quarter ended
($ in thousands)
September 30, 2024
June 30, 2024
Increase (decrease)
September 30, 2023
Increase (decrease)
Employee compensation and benefits
$
45,359
$
44,524
$
835
2
%
$
40,771
$
4,588
11
%
Deposit costs
23,781
21,706
2,075
10
%
20,987
2,794
13
%
Occupancy
4,372
4,197
175
4
%
4,198
174
4
%
Core conversion expense
1,375
1,250
125
10
%
—
1,375
100
%
Other expense
23,120
22,340
780
3
%
22,688
432
2
%
Total noninterest expense
$
98,007
$
94,017
$
3,990
4
%
$
88,644
$
9,363
11
%
Employee compensation and benefits increased $0.8 million from
the linked quarter primarily due to an increase in the number of
work days in the quarter and the success in recruiting new
relationship bankers. Deposit costs relate to certain specialized
deposit businesses that receive an earnings credit allowance for
deposit related expenses that are impacted by interest rates and
average balances. Deposit costs increased $2.1 million from the
linked quarter primarily due to an increase of $151.6 million in
average deposit vertical balances from the linked quarter. Expenses
related to the core system conversion for the current and linked
quarters were $1.4 million and $1.3 million, respectively, due to
the continued progress on the project, which is expected to be
completed during the fourth quarter 2024.
The increase in noninterest expense of $9.4 million from the
prior year quarter was primarily due to an increase in the
associate base, merit increases throughout 2023 and 2024, an
increase in variable deposit costs due to higher earnings credit
rates and average balances, and additional expenses incurred
related to the core system conversion.
For the third quarter 2024, the core efficiency ratio5 was
58.4%, compared to 58.1% for the linked quarter and 56.2% for the
prior year quarter.
___________________
5 Core efficiency ratio is a non-GAAP
measure. Refer to discussion and reconciliation of this measure in
the accompanying financial tables.
Income Taxes
The effective tax rate was 19.4%, compared to 20.5% and 21.7% in
the linked and prior year quarters, respectively. The decrease in
the effective tax rate from the linked and prior year quarters was
driven by tax credit opportunities the Company has deployed as part
of its tax planning strategy.
Capital
The following table presents total equity and various capital
ratios for the most recent five quarters:
At
($ in thousands)
September 30, 2024*
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Shareholders’ equity
$
1,832,011
$
1,755,273
$
1,731,725
$
1,716,068
$
1,611,880
Total risk-based capital to risk-weighted
assets
14.8
%
14.6
%
14.3
%
14.2
%
14.1
%
Tier 1 capital to risk weighted assets
13.2
%
13.0
%
12.8
%
12.7
%
12.6
%
Common equity tier 1 capital to
risk-weighted assets
11.9
%
11.7
%
11.4
%
11.3
%
11.2
%
Leverage ratio
11.2
%
11.1
%
11.0
%
11.0
%
10.9
%
Tangible common equity to tangible
assets
9.50
%
9.18
%
9.01
%
8.96
%
8.51
%
*Capital ratios for the current quarter
are preliminary and subject to, among other things, completion and
filing of the Company’s regulatory reports and ongoing regulatory
review.
Total equity was $1.8 billion at September 30, 2024, an increase
of $76.7 million from the linked quarter. Tangible common book
value per share was $37.26 at September 30, 2024, compared to
$35.02 and $31.06 at June 30, 2024 and September 30, 2023,
respectively.
The Company’s regulatory capital ratios continue to exceed the
“well-capitalized” regulatory benchmark. Capital ratios for the
current quarter are subject to, among other things, completion and
filing of the Company’s regulatory reports and ongoing regulatory
review.
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 additional financial measures, such
as tangible common equity, PPNR, ROATCE, core efficiency ratio, the
tangible common equity to tangible assets ratio, tangible book
value per common share, estimated insured deposits and adjusted
diluted earnings per share, in this release that are considered
“non-GAAP financial measures.” Generally, a non-GAAP financial
measure is a numerical measure of a company’s financial
performance, financial position, or cash flows that exclude (or
include) amounts that are included in (or excluded from) the most
directly comparable measure calculated and presented in accordance
with GAAP.
The Company considers its tangible common equity, PPNR, ROATCE,
core efficiency ratio, the tangible common equity to tangible
assets ratio, tangible book value per common share, estimated
insured deposits and adjusted diluted earnings per share,
collectively “core performance measures,” presented in this
earnings release and the included tables as important measures of
financial performance, even though they are non-GAAP measures, as
they provide supplemental information by which to evaluate the
impact of certain non-comparable items, and the Company’s operating
performance on an ongoing basis. Core performance measures exclude
certain other income and expense items, such as the FDIC special
assessment, core conversion expenses, merger-related expenses,
facilities charges, and the gain or loss on the sale of other real
estate owned and investment securities, that the Company believes
to be not indicative of or useful to measure the Company’s
operating performance on an ongoing basis. The attached tables
contain a reconciliation of these core performance measures to the
GAAP measures. The Company believes that the tangible common equity
to tangible assets ratio provides useful information to investors
about the Company’s capital strength even though it is considered
to be a non-GAAP financial measure and is not part of the
regulatory capital requirements to which the Company is
subject.
The Company believes these non-GAAP measures and ratios, when
taken together with the corresponding GAAP measures and ratios,
provide meaningful supplemental information regarding the Company’s
performance and capital strength. The Company’s management uses,
and believes that investors benefit from referring to, these
non-GAAP measures and ratios in assessing the Company’s operating
results and related trends and when forecasting future periods.
However, these non-GAAP measures and ratios should be considered in
addition to, and not as a substitute for or preferable to, ratios
prepared in accordance with GAAP. In the attached tables, the
Company has provided a reconciliation of, where applicable, the
most comparable GAAP financial measures and ratios to the non-GAAP
financial measures and ratios, or a reconciliation of the non-GAAP
calculation of the financial measures for the periods
indicated.
Conference Call and Webcast Information
The Company will host a conference call and webcast at 10:00
a.m. Central Time on Tuesday, October 22, 2024. During the call,
management will review the third quarter 2024 results and related
matters. This press release as well as a related slide presentation
will be accessible on the Company’s website at
www.enterprisebank.com under “Investor Relations” prior to the
scheduled broadcast of the conference call. The call can be
accessed via this same website page, or via telephone at
1-800-715-9871. We encourage participants to pre-register for the
conference call using the following link:
https://bit.ly/EFSC3Q2024EarningsCallRegistration. Callers who
pre-register will be given a conference passcode and unique PIN to
gain immediate access to the call and bypass the live operator.
Participants may pre-register at any time, including up to and
after the call start time. A recorded replay of the conference call
will be available on the website after the call’s completion. The
replay will be available for at least two weeks following the
conference call.
About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with
approximately $15.0 billion in assets, is a financial holding
company headquartered in Clayton, Missouri. Enterprise Bank &
Trust, a Missouri state-chartered trust company with banking powers
and a wholly-owned subsidiary of EFSC, operates branch offices in
Arizona, California, Florida, Kansas, Missouri, Nevada, and New
Mexico, and SBA loan and deposit production offices throughout the
country. Enterprise Bank & Trust offers a range of business and
personal banking services and wealth management services.
Enterprise Trust, a division of Enterprise Bank & Trust,
provides financial planning, estate planning, investment management
and trust services to businesses, individuals, institutions,
retirement plans and non-profit organizations. Additional
information is available at www.enterprisebank.com.
Enterprise Financial Services Corp’s common stock is traded on
the Nasdaq Stock Market under the symbol “EFSC.” Please visit our
website at www.enterprisebank.com to see our regularly posted
material information.
Forward-looking Statements
Readers should note that, in addition to the historical
information contained herein, this press release 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. Such forward-looking statements are
based on management’s current expectations and beliefs concerning
future developments and their potential effects on the Company
including, without limitation, plans, strategies and goals, and
statements about the Company’s expectations regarding revenue and
asset growth, financial performance and profitability, loan and
deposit growth, liquidity, yields and returns, loan diversification
and credit management, shareholder value creation and the impact of
acquisitions.
Forward-looking statements are typically identified by words
such as “believe,” “expect,” “anticipate,” “intend,” “outlook,”
“estimate,” “forecast,” “project,” “pro forma”, “pipeline” and
other similar words and expressions. Forward-looking statements are
subject to numerous assumptions, risks and uncertainties, which
change over time. Forward-looking statements speak only as of the
date they are made. Because forward-looking statements are subject
to assumptions and uncertainties, actual results or future events
could differ, possibly materially, from those anticipated in the
forward-looking statements and future results could differ
materially from historical performance. They are neither statements
of historical fact nor guarantees or assurances of future
performance. While there is no assurance that any list of risks and
uncertainties or risk factors is complete, important factors that
could cause actual results to differ materially from those in the
forward-looking statements include the following, without
limitation: the Company’s ability to efficiently integrate
acquisitions into its operations, retain the customers of these
businesses and grow the acquired operations, as well as credit
risk, changes in the appraised valuation of real estate securing
impaired loans, outcomes of litigation and other contingencies,
exposure to general and local economic and market conditions, high
unemployment rates, higher inflation and its impacts (including
U.S. federal government measures to address higher inflation), U.S.
fiscal debt, budget and tax matters, and any slowdown in global
economic growth, risks associated with rapid increases or decreases
in prevailing interest rates, our ability to attract and retain
deposits and access to other sources of liquidity, consolidation in
the banking industry, competition from banks and other financial
institutions, the Company’s ability to attract and retain
relationship officers and other key personnel, burdens imposed by
federal and state regulation, changes in legislative or regulatory
requirements, as well as current, pending or future legislation or
regulation that could have a negative effect on our revenue and
businesses, including rules and regulations relating to bank
products and financial services, changes in accounting policies and
practices or accounting standards, changes in the method of
determining LIBOR and the phase out of LIBOR, natural disasters,
terrorist activities, war and geopolitical matters (including the
war in Israel and potential for a broader regional conflict and the
war in Ukraine and the imposition of additional sanctions and
export controls in connection therewith), or pandemics, and their
effects on economic and business environments in which we operate,
including the related disruption to the financial market and other
economic activity, and those factors and risks referenced from time
to time in the Company’s filings with the Securities and Exchange
Commission (the “SEC”), including in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2023, and the
Company’s other filings with the SEC. The Company cautions that the
preceding list is not exhaustive of all possible risk factors and
other factors could also adversely affect the Company’s
results.
For any forward-looking statements made in this press release or
in any documents, EFSC claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
Readers are cautioned not to place undue reliance on any
forward-looking statements. Except to the extent required by
applicable law or regulation, EFSC disclaims any obligation to
revise or publicly release any revision or update to any of the
forward-looking statements included herein to reflect events or
circumstances that occur after the date on which such statements
were made.
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited)
Quarter ended
Nine months ended
(in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
EARNINGS SUMMARY
Net interest income
$
143,469
$
140,529
$
137,728
$
140,732
$
141,639
$
421,726
$
421,860
Provision for credit losses
4,099
4,819
5,756
18,053
8,030
14,674
18,552
Noninterest income
21,420
15,494
12,158
25,452
12,085
49,072
43,273
Noninterest expense
98,007
94,017
93,501
92,603
88,644
285,525
255,583
Income before income tax expense
62,783
57,187
50,629
55,528
57,050
170,599
190,998
Income tax expense
12,198
11,741
10,228
10,999
12,385
34,167
41,468
Net income
50,585
45,446
40,401
44,529
44,665
136,432
149,530
Preferred stock dividends
938
937
938
937
938
2,813
2,813
Net income available to common
shareholders
$
49,647
$
44,509
$
39,463
$
43,592
$
43,727
$
133,619
$
146,717
Diluted earnings per common share
$
1.32
$
1.19
$
1.05
$
1.16
$
1.17
$
3.56
$
3.91
Adjusted diluted earnings per common
share1
$
1.29
$
1.21
$
1.07
$
1.20
$
1.17
$
3.57
$
3.90
Return on average assets
1.36
%
1.25
%
1.12
%
1.23
%
1.26
%
1.24
%
1.47
%
Adjusted return on average assets1
1.32
%
1.27
%
1.14
%
1.28
%
1.26
%
1.24
%
1.46
%
Return on average common equity1
11.40
%
10.68
%
9.52
%
10.94
%
11.00
%
10.55
%
12.73
%
Adjusted return on average common
equity1
11.09
%
10.90
%
9.70
%
11.35
%
11.00
%
10.58
%
12.69
%
ROATCE1
14.55
%
13.77
%
12.31
%
14.38
%
14.49
%
13.56
%
16.90
%
Adjusted ROATCE1
14.16
%
14.06
%
12.53
%
14.92
%
14.49
%
13.60
%
16.85
%
Net interest margin (tax equivalent)
4.17
%
4.19
%
4.13
%
4.23
%
4.33
%
4.17
%
4.50
%
Efficiency ratio
59.44
%
60.26
%
62.38
%
55.72
%
57.66
%
60.65
%
54.95
%
Core efficiency ratio1
58.42
%
58.09
%
60.21
%
53.06
%
56.18
%
58.89
%
53.55
%
Assets
$
14,954,125
$
14,615,666
$
14,613,338
$
14,518,590
$
14,025,042
Average assets
$
14,849,455
$
14,646,381
$
14,556,119
$
14,332,804
$
14,068,860
$
14,684,589
$
13,627,448
Period end common shares outstanding
37,184
37,344
37,515
37,416
37,385
Dividends per common share
$
0.27
$
0.26
$
0.25
$
0.25
$
0.25
$
0.78
$
0.75
Tangible book value per common share1
$
37.26
$
35.02
$
34.21
$
33.85
$
31.06
Tangible common equity to tangible
assets1
9.50
%
9.18
%
9.01
%
8.96
%
8.51
%
Total risk-based capital to risk-weighted
assets2
14.8
%
14.6
%
14.3
%
14.2
%
14.1
%
1Refer to Reconciliations of Non-GAAP
Financial Measures tables for a reconciliation of these measures to
GAAP.
2Capital ratios for the current quarter
are preliminary and subject to, among other things, completion and
filing of the Company’s regulatory reports and ongoing regulatory
review.
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited) (continued)
Quarter ended
Nine months ended
(in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
INCOME STATEMENTS
NET INTEREST INCOME
Interest income
$
216,304
$
211,644
$
207,723
$
207,083
$
200,906
$
635,671
$
557,836
Interest expense
72,835
71,115
69,995
66,351
59,267
213,945
135,976
Net interest income
143,469
140,529
137,728
140,732
141,639
421,726
421,860
Provision for credit losses
4,099
4,819
5,756
18,053
8,030
14,674
18,552
Net interest income after provision for
credit losses
139,370
135,710
131,972
122,679
133,609
407,052
403,308
NONINTEREST INCOME
Deposit service charges
4,649
4,542
4,423
4,334
4,187
13,614
12,225
Wealth management revenue
2,599
2,590
2,544
2,428
2,614
7,733
7,602
Card services revenue
2,573
2,497
2,412
2,666
2,560
7,482
7,362
Tax credit income (loss)
3,252
1,874
(2,190
)
9,688
(2,673
)
2,936
(492
)
Other income
8,347
3,991
4,969
6,336
5,397
17,307
16,576
Total noninterest income
21,420
15,494
12,158
25,452
12,085
49,072
43,273
NONINTEREST EXPENSE
Employee compensation and benefits
45,359
44,524
45,262
39,651
40,771
135,145
124,915
Deposit costs
23,781
21,706
20,277
21,606
20,987
65,764
50,688
Occupancy
4,372
4,197
4,326
4,313
4,198
12,895
12,213
FDIC special assessment
—
—
625
2,412
—
625
—
Core conversion expense
1,375
1,250
350
—
—
2,975
—
Other expense
23,120
22,340
22,661
24,621
22,688
68,121
67,767
Total noninterest expense
98,007
94,017
93,501
92,603
88,644
285,525
255,583
Income before income tax expense
62,783
57,187
50,629
55,528
57,050
170,599
190,998
Income tax expense
12,198
11,741
10,228
10,999
12,385
34,167
41,468
Net income
$
50,585
$
45,446
$
40,401
$
44,529
$
44,665
$
136,432
$
149,530
Preferred stock dividends
938
937
938
937
938
2,813
2,813
Net income available to common
shareholders
$
49,647
$
44,509
$
39,463
$
43,592
$
43,727
$
133,619
$
146,717
Basic earnings per common share
$
1.33
$
1.19
$
1.05
$
1.16
$
1.17
$
3.57
$
3.93
Diluted earnings per common share
$
1.32
$
1.19
$
1.05
$
1.16
$
1.17
$
3.56
$
3.91
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited) (continued)
At
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
BALANCE SHEET
ASSETS
Cash and due from banks
$
210,984
$
176,698
$
157,697
$
193,275
$
190,806
Interest-earning deposits
218,919
219,342
215,951
243,610
184,245
Debt and equity investments
2,714,194
2,460,549
2,443,977
2,434,902
2,279,578
Loans held for sale
304
606
610
359
212
Loans
11,079,892
11,000,007
11,028,492
10,884,118
10,616,820
Allowance for credit losses
(139,778
)
(139,464
)
(135,498
)
(134,771
)
(142,133
)
Total loans, net
10,940,114
10,860,543
10,892,994
10,749,347
10,474,687
Fixed assets, net
44,368
44,831
44,382
42,681
41,268
Goodwill
365,164
365,164
365,164
365,164
365,164
Intangible assets, net
9,400
10,327
11,271
12,318
13,425
Other assets
450,678
477,606
481,292
476,934
475,657
Total assets
$
14,954,125
$
14,615,666
$
14,613,338
$
14,518,590
$
14,025,042
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits
$
3,934,245
$
3,928,308
$
3,805,334
$
3,958,743
$
3,852,486
Interest-bearing deposits
8,531,077
8,354,075
8,448,367
8,217,628
8,057,421
Total deposits
12,465,322
12,282,383
12,253,701
12,176,371
11,909,907
Subordinated debentures and notes
156,407
156,265
156,124
155,984
155,844
FHLB advances
150,000
78,000
125,000
—
—
Other borrowings
170,815
178,269
195,246
297,829
182,372
Other liabilities
179,570
165,476
151,542
172,338
165,039
Total liabilities
13,122,114
12,860,393
12,881,613
12,802,522
12,413,162
Shareholders’ equity:
Preferred stock
71,988
71,988
71,988
71,988
71,988
Common stock
372
373
375
374
374
Additional paid-in capital
992,642
994,116
995,969
995,208
992,044
Retained earnings
845,844
810,935
778,784
749,513
715,303
Accumulated other comprehensive loss
(78,835
)
(122,139
)
(115,391
)
(101,015
)
(167,829
)
Total shareholders’ equity
1,832,011
1,755,273
1,731,725
1,716,068
1,611,880
Total liabilities and shareholders’
equity
$
14,954,125
$
14,615,666
$
14,613,338
$
14,518,590
$
14,025,042
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited) (continued)
Nine months ended
September 30, 2024
September 30, 2023
($ in thousands)
Average Balance
Interest Income/ Expense
Average Yield/ Rate
Average Balance
Interest Income/ Expense
Average Yield/ Rate
AVERAGE BALANCE SHEET
ASSETS
Interest-earning assets:
Loans1, 2
$
10,954,063
$
567,687
6.92%
$
10,203,291
$
503,458
6.60%
Securities2
2,433,659
60,851
3.34
2,296,485
52,743
3.07
Interest-earning deposits
332,409
13,306
5.35
206,110
7,799
5.06
Total interest-earning assets
13,720,131
641,844
6.25
12,705,886
564,000
5.93
Noninterest-earning assets
964,458
921,562
Total assets
$
14,684,589
$
13,627,448
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing demand accounts
$
2,964,667
$
57,415
2.59%
$
2,462,988
$
29,728
1.61%
Money market accounts
3,462,993
96,777
3.73
2,942,970
62,397
2.83
Savings accounts
573,853
983
0.23
688,157
707
0.14
Certificates of deposit
1,374,176
44,441
4.32
1,139,489
28,555
3.35
Total interest-bearing deposits
8,375,689
199,616
3.18
7,233,604
121,387
2.24
Subordinated debentures and notes
156,188
7,863
6.72
155,633
7,306
6.28
FHLB advances
39,427
1,649
5.59
73,020
2,752
5.04
Securities sold under agreements to
repurchase
167,939
4,422
3.52
174,783
2,422
1.85
Other borrowings
38,381
395
1.37
79,396
2,109
3.55
Total interest-bearing liabilities
8,777,624
213,945
3.26
7,716,436
135,976
2.36
Noninterest-bearing liabilities:
Demand deposits
3,982,015
4,178,038
Other liabilities
161,033
119,883
Total liabilities
12,920,672
12,014,357
Shareholders' equity
1,763,917
1,613,091
Total liabilities and shareholders'
equity
$
14,684,589
$
13,627,448
Total net interest income
$
427,899
$
428,024
Net interest margin
4.17%
4.50%
1 Average balances include
nonaccrual loans. Interest income includes net loan fees of $7.2
million and $10.7 million for the nine months ended September 30,
2024 and September 30, 2023, respectively.
2 Non-taxable income is presented
on a fully tax-equivalent basis using a tax rate of approximately
25%. The tax-equivalent adjustments were $6.2 million for both the
nine months ended September 30, 2024 and September 30, 2023,
respectively.
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited) (continued)
At or for the quarter ended
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
LOAN PORTFOLIO
Commercial and industrial
$
4,628,488
$
4,619,448
$
4,766,310
$
4,672,559
$
4,448,535
Commercial real estate
4,915,176
4,856,751
4,804,803
4,803,571
4,794,355
Construction real estate
896,325
893,672
820,416
760,425
723,796
Residential real estate
355,279
351,934
367,218
372,188
376,120
Other
284,624
278,202
269,745
275,375
274,014
Total loans
$
11,079,892
$
11,000,007
$
11,028,492
$
10,884,118
$
10,616,820
DEPOSIT PORTFOLIO
Noninterest-bearing demand accounts
$
3,934,245
$
3,928,308
$
3,805,334
$
3,958,743
$
3,852,486
Interest-bearing demand accounts
3,048,981
2,951,899
2,956,282
2,950,259
2,749,598
Money market and savings accounts
4,121,543
4,039,626
4,006,702
3,994,455
3,837,145
Brokered certificates of deposit
480,934
494,870
659,005
482,759
695,551
Other certificates of deposit
879,619
867,680
826,378
790,155
775,127
Total deposits
$
12,465,322
$
12,282,383
$
12,253,701
$
12,176,371
$
11,909,907
AVERAGE BALANCES
Loans
$
10,971,575
$
10,962,488
$
10,927,932
$
10,685,961
$
10,521,966
Securities
2,503,124
2,396,519
2,400,571
2,276,915
2,302,850
Interest-earning assets
13,877,631
13,684,459
13,596,571
13,383,638
13,160,587
Assets
14,849,455
14,646,381
14,556,119
14,332,804
14,068,860
Deposits
12,546,086
12,344,253
12,180,703
12,163,346
11,922,534
Shareholders’ equity
1,804,369
1,748,240
1,738,698
1,652,882
1,648,605
Tangible common equity1
1,357,362
1,300,305
1,289,776
1,202,872
1,197,486
YIELDS (tax equivalent)
Loans
6.95
%
6.95
%
6.87
%
6.87
%
6.80
%
Securities
3.40
3.35
3.27
3.20
3.11
Interest-earning assets
6.26
6.28
6.20
6.20
6.12
Interest-bearing deposits
3.22
3.19
3.14
3.03
2.77
Deposits
2.18
2.16
2.13
2.03
1.84
Subordinated debentures and notes
6.86
6.91
6.40
6.30
6.28
FHLB advances and other borrowed funds
3.01
3.52
3.80
3.06
2.76
Interest-bearing liabilities
3.28
3.26
3.22
3.09
2.84
Net interest margin
4.17
4.19
4.13
4.23
4.33
1Refer to Reconciliations of Non-GAAP
Financial Measures tables for a reconciliation of these measures to
GAAP.
ENTERPRISE FINANCIAL SERVICES
CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited) (continued)
Quarter ended
(in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
ASSET QUALITY
Net charge-offs
$
3,850
$
605
$
5,864
$
28,479
$
6,856
Nonperforming loans
28,376
39,384
35,642
43,728
48,932
Classified assets
179,883
169,822
185,150
185,389
184,393
Nonperforming loans to total loans
0.26
%
0.36
%
0.32
%
0.40
%
0.46
%
Nonperforming assets to total assets
0.22
%
0.33
%
0.30
%
0.34
%
0.40
%
Allowance for credit losses to total
loans
1.26
%
1.27
%
1.23
%
1.24
%
1.34
%
Allowance for credit losses to total
loans, excluding guaranteed loans
1.38
%
1.38
%
1.34
%
1.35
%
1.47
%
Allowance for credit losses to
nonperforming loans
492.6
%
354.1
%
380.2
%
308.2
%
290.5
%
Net charge-offs to average loans
-annualized
0.14
%
0.02
%
0.22
%
1.06
%
0.26
%
WEALTH MANAGEMENT
Trust assets under management
$
2,499,807
$
2,367,409
$
2,352,902
$
2,235,073
$
2,129,408
SHARE DATA
Book value per common share
$
47.33
$
45.08
$
44.24
$
43.94
$
41.19
Tangible book value per common share1
$
37.26
$
35.02
$
34.21
$
33.85
$
31.06
Market value per share
$
51.26
$
40.91
$
40.56
$
44.65
$
37.50
Period end common shares outstanding
37,184
37,344
37,515
37,416
37,385
Average basic common shares
37,337
37,485
37,490
37,421
37,405
Average diluted common shares
37,483
37,540
37,597
37,554
37,520
CAPITAL
Total risk-based capital to risk-weighted
assets2
14.8
%
14.6
%
14.3
%
14.2
%
14.1
%
Tier 1 capital to risk-weighted
assets2
13.2
%
13.0
%
12.8
%
12.7
%
12.6
%
Common equity tier 1 capital to
risk-weighted assets2
11.9
%
11.7
%
11.4
%
11.3
%
11.2
%
Tangible common equity to tangible
assets1
9.50
%
9.18
%
9.01
%
8.96
%
8.51
%
1Refer to Reconciliations of Non-GAAP
Financial Measures tables for a reconciliation of these measures to
GAAP.
2Capital ratios for the current quarter
are preliminary and subject to, among other things, completion and
filing of the Company’s regulatory reports and ongoing regulatory
review.
ENTERPRISE FINANCIAL SERVICES
CORP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Quarter ended
Nine months ended
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
CORE EFFICIENCY RATIO
Net interest income (GAAP)
$
143,469
$
140,529
$
137,728
$
140,732
$
141,639
$
421,726
$
421,860
Tax-equivalent adjustment
2,086
2,047
2,040
1,915
2,061
6,173
6,164
Noninterest income (GAAP)
21,420
15,494
12,158
25,452
12,085
49,072
43,273
Less gain on sale of investment
securities
—
—
—
220
—
—
381
Less gain (loss) on sale of other real
estate owned
3,159
—
(2
)
—
—
3,157
187
Core revenue (non-GAAP)
163,816
158,070
151,928
167,879
155,785
473,814
470,729
Noninterest expense (GAAP)
98,007
94,017
93,501
92,603
88,644
285,525
255,583
Less FDIC special assessment
—
—
625
2,412
—
625
—
Less core conversion expense
1,375
1,250
350
—
—
2,975
—
Less amortization on intangibles
927
944
1,047
1,108
1,118
2,918
3,493
Core noninterest expense (non-GAAP)
$
95,705
$
91,823
$
91,479
$
89,083
$
87,526
$
279,007
$
252,090
Core efficiency ratio (non-GAAP)
58.42
%
58.09
%
60.21
%
53.06
%
56.18
%
58.89
%
53.55
%
Quarter ended
(in thousands, except per share data)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
TANGIBLE COMMON EQUITY, TANGIBLE BOOK
VALUE PER SHARE AND TANGIBLE COMMON EQUITY RATIO
Shareholders’ equity (GAAP)
$
1,832,011
$
1,755,273
$
1,731,725
$
1,716,068
$
1,611,880
Less preferred stock
71,988
71,988
71,988
71,988
71,988
Less goodwill
365,164
365,164
365,164
365,164
365,164
Less intangible assets
9,400
10,327
11,271
12,318
13,425
Tangible common equity (non-GAAP)
$
1,385,459
$
1,307,794
$
1,283,302
$
1,266,598
$
1,161,303
Less net unrealized losses on HTM
securities, after tax
34,856
52,220
47,822
41,038
81,367
Tangible common equity adjusted for
unrealized losses on HTM securities (non-GAAP)
$
1,350,603
$
1,255,574
$
1,235,480
$
1,225,560
$
1,079,936
Common shares outstanding
37,184
37,344
37,515
37,416
37,385
Tangible book value per share
(non-GAAP)
$
37.26
$
35.02
$
34.21
$
33.85
$
31.06
Total assets (GAAP)
$
14,954,125
$
14,615,666
$
14,613,338
$
14,518,590
$
14,025,042
Less goodwill
365,164
365,164
365,164
365,164
365,164
Less intangible assets
9,400
10,327
11,271
12,318
13,425
Tangible assets (non-GAAP)
$
14,579,561
$
14,240,175
$
14,236,903
$
14,141,108
$
13,646,453
Tangible common equity to tangible assets
(non-GAAP)
9.50
%
9.18
%
9.01
%
8.96
%
8.51
%
Tangible common equity to tangible assets
adjusted for unrealized losses on HTM securities (non-GAAP)
9.26
%
8.82
%
8.68
%
8.67
%
7.91
%
Quarter Ended
Nine months ended
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
RETURN ON AVERAGE TANGIBLE COMMON
EQUITY (ROATCE), RETURN ON AVERAGE ASSETS (ROAA) AND DILUTED
EARNINGS PER SHARE
Average shareholder’s equity (GAAP)
$
1,804,369
$
1,748,240
$
1,738,698
$
1,652,882
$
1,648,605
$
1,763,917
$
1,613,091
Less average preferred stock
71,988
71,988
71,988
71,988
71,988
71,988
71,988
Less average goodwill
365,164
365,164
365,164
365,164
365,164
365,164
365,164
Less average intangible assets
9,855
10,783
11,770
12,858
13,967
10,799
15,094
Average tangible common equity
(non-GAAP)
$
1,357,362
$
1,300,305
$
1,289,776
$
1,202,872
$
1,197,486
$
1,315,966
$
1,160,845
Net income (GAAP)
$
50,585
$
45,446
$
40,401
$
44,529
$
44,665
$
136,432
$
149,530
FDIC special assessment (after tax)
—
—
470
1,814
—
470
—
Core conversion expense (after tax)
1,034
940
263
—
—
2,237
—
Less gain on sale of investment securities
(after tax)
—
—
—
165
—
—
287
Less gain (loss) on sales of other real
estate owned (after tax)
2,375
—
(1
)
—
—
2,374
141
Net income adjusted (non-GAAP)
$
49,244
$
46,386
$
41,135
$
46,178
$
44,665
$
136,765
$
149,102
Less preferred stock dividends
938
937
938
937
938
2,813
2,813
Net income available to common
shareholders adjusted (non-GAAP)
$
48,306
$
45,449
$
40,197
$
45,241
$
43,727
$
133,952
$
146,289
Return on average common equity
(non-GAAP)
11.40
%
10.68
%
9.52
%
10.94
%
11.00
%
10.55
%
12.73
%
Adjusted return on average common equity
(non-GAAP)
11.09
%
10.90
%
9.70
%
11.35
%
11.00
%
10.58
%
12.69
%
ROATCE (non-GAAP)
14.55
%
13.77
%
12.31
%
14.38
%
14.49
%
13.56
%
16.90
%
Adjusted ROATCE (non-GAAP)
14.16
%
14.06
%
12.53
%
14.92
%
14.49
%
13.60
%
16.85
%
Average assets
$
14,849,455
$
14,646,381
$
14,556,119
$
14,332,804
$
14,068,860
$
14,684,589
$
13,627,448
Return on average assets (GAAP)
1.36
%
1.25
%
1.12
%
1.23
%
1.26
%
1.24
%
1.47
%
Adjusted return on average assets
(non-GAAP)
1.32
%
1.27
%
1.14
%
1.28
%
1.26
%
1.24
%
1.46
%
Average diluted common shares
37,483
37,540
37,597
37,554
37,520
37,547
37,493
Diluted earnings per share (GAAP)
$
1.32
$
1.19
$
1.05
$
1.16
$
1.17
$
3.56
$
3.91
Adjusted diluted earnings per share
(non-GAAP)
$
1.29
$
1.21
$
1.07
$
1.20
$
1.17
$
3.57
$
3.90
Quarter ended
($ in thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
CALCULATION OF PRE-PROVISION NET
REVENUE (PPNR)
Net interest income
$
143,469
$
140,529
$
137,728
$
140,732
$
141,639
Noninterest income
21,420
15,494
12,158
25,452
12,085
FDIC special assessment
—
—
625
2,412
—
Core conversion expense
1,375
1,250
350
—
—
Less gain on sale of investment
securities
—
—
—
220
—
Less gain (loss) on sales of other real
estate owned
3,159
—
(2
)
—
—
Less noninterest expense
98,007
94,017
93,501
92,603
88,644
PPNR (non-GAAP)
$
65,098
$
63,256
$
57,362
$
75,773
$
65,080
Quarter ended
($ in thousands)
Sep 30, 2024
Jun 30, 2024
CALCULATION OF ESTIMATED INSURED
DEPOSITS
Estimated uninsured deposits per Call
Report
$
4,180,066
$
4,020,979
Collateralized/affiliate deposits
(463,103
)
(454,084
)
Accrued interest on deposits
(5,830
)
(5,632
)
Adjusted uninsured/uncollateralized
deposits
3,711,133
3,561,263
Estimated insured/collateralized
deposits
8,754,189
8,721,120
Total deposits
$
12,465,322
$
12,282,383
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241021002081/en/
Investor Relations: Keene Turner, Senior Executive Vice
President and CFO (314) 512-7233 Media: Steve Richardson, Senior
Vice President, Corporate Communications (314) 995-5695
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