EFSC
$35.20
Enterprises Finl Svc
($.55)
(1.54%)
Earnings Details
3rd Quarter September 2020
Monday, October 19, 2020 4:03:00 PM
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Summary

Enterprises Finl Svc (EFSC) Recent Earnings

Enterprises Finl Svc (EFSC) reported 3rd Quarter September 2020 earnings of $0.68 per share on revenue of $83.4 million. The consensus earnings estimate was $0.92 per share on revenue of $78.9 million. Revenue fell 11.9% compared to the same quarter a year ago.

Enterprise Financial Services Corporation is a financial holding company. It offers banking and wealth management services to individuals and business customers located in the St. Louis, Kansas City and Phoenix metropolitan markets.

Results
Reported Earnings
$0.68
Earnings Whisper
-
Consensus Estimate
$0.92
Reported Revenue
$83.4 Mil
Revenue Estimate
$78.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Enterprise Financial Reports Third Quarter 2020 Results

Third Quarter Results

  • Net income of $18.0 million, $0.68 per diluted share, including the impact of provision for credit losses of $0.40 per share
  • Net interest margin (tax equivalent) of 3.29%
  • Return on average assets of 0.86%
  • Maintained dividend of $0.18 per share for fourth quarter
  • Received Federal Reserve and FDIC approval for announced acquisition of Seacoast Commerce Banc Holdings (“Seacoast”) and Seacoast Commerce Bank

ST. LOUIS--(BUSINESS WIRE)--Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”) reported net income of $18.0 million for the third quarter 2020, an increase of $3.3 million compared to the linked second quarter (“linked quarter”) and a decrease of $11.1 million from the prior year quarter. Earnings per diluted share (“EPS”) was $0.68 for the third quarter 2020, compared to $0.56 and $1.08 for the linked and prior year quarters, respectively. Net income and EPS in the current quarter increased from the linked quarter primarily due to a reduction in provision for credit losses and an increase in noninterest income. This increase was partially offset by $1.6 million of merger-related expenses. The decrease in net income and EPS from the prior year quarter was primarily due to an increase in provision for credit losses.

Jim Lally, EFSC’s President and Chief Executive Officer, commented, “Today we reported earnings of $0.68 per diluted share for the third quarter. These financial results reflect solid performance with pre-provision net revenue1 of $38.0 million, or 1.81% of average assets. Given the ongoing economic uncertainty, we continued to build our allowance for credit losses, and our earnings profile allowed us to also build capital during the third quarter. As we move into the end of 2020, we remain well positioned to continue to support our customers, complete the acquisition of Seacoast and execute on our business plans.”

Highlights

  • Earnings - Net income in the third quarter 2020 was $18.0 million, an increase of $3.3 million compared to the linked quarter and a decrease of $11.1 million from the prior year quarter. EPS was $0.68 per diluted share for the third quarter 2020, compared to $0.56 and $1.08 per diluted share for the linked and prior year quarters, respectively.
  • Pre-provision net revenue1 (“PPNR”) - PPNR (excluding merger-related expenses) of $38.0 million in the third quarter 2020 increased $0.1 million and decreased $0.7 million from the linked and prior year quarters, respectively.

1 PPNR is a nonGAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

  • Net interest income and net interest margin (“NIM”) - Net interest income of $63.4 million for the third quarter 2020 decreased $2.5 million and increased $0.3 million, from the linked quarter and prior year quarter, respectively. NIM was 3.29% for the third quarter 2020, compared to 3.53% and 3.81% for the linked quarter and prior year quarter, respectively.
  • Noninterest income - Noninterest income of $12.6 million for the third quarter 2020 increased $2.7 million and decreased $0.9 million from the linked quarter and prior year quarter, respectively. The current quarter increase was driven by volume increases in deposit services, card services, mortgage banking and tax credit activity.
  • Loans - Total loans declined $13.7 million, or 0.9% on an annualized basis, from the linked quarter to $6.1 billion as of September 30, 2020. Year-over-year, loans grew $898.3 million, or 17.2% on an annualized basis, from $5.2 billion as of September 30, 2019. Average loans totaled $6.1 billion for the quarter ended September 30, 2020 compared to $6.0 billion and $5.2 billion for the linked and prior year quarters, respectively. Paycheck Protection Program (“PPP”) loans primarily contributed to growth in the loan portfolio over the prior year quarter. As of September 30, 2020, loan modifications in a deferral status comprised 2% of the loan portfolio.

PPP details:

 

Quarter ended

($ in thousands, except per share data)

September 30, 2020

 

June 30, 2020

PPP loans outstanding, net of unearned fees

$

819,100

 

 

$

807,814

 

Average PPP loans outstanding, net

813,244

 

 

634,632

 

PPP average loan size

216

 

 

224

 

PPP interest and fee income

5,226

 

 

4,083

 

PPP unearned fees

19,522

 

 

22,414

 

PPP average yield

2.56

%

 

2.59

%

 

Quarter ended

 

September 30, 2020

 

June 30, 2020

Financial Metrics:

As Reported

 

Excluding PPP*

 

As Reported

 

Excluding PPP*

EPS

$

0.68

 

 

$

0.53

 

 

$

0.56

 

 

$

0.44

 

ROAA

0.86

%

 

0.74

%

 

0.72

%

 

0.62

%

PPNR ROAA (excluding merger-related exp)

1.81

%

 

1.73

%

 

1.87

%

 

1.81

%

Tangible common equity/tangible assets*

7.99

%

 

8.89

%

 

7.81

%

 

8.67

%

Leverage ratio

9.2

%

 

10.2

%

 

9.2

%

 

10.0

%

NIM (tax equivalent)

3.29

%

 

3.37

%

 

3.53

%

 

3.62

%

Allowance for credit losses on loans/loans

2.01

%

 

2.32

%

 

1.80

%

 

2.07

%

 

 

 

 

 

 

 

 

* Non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables. Calculations not adjusted for increase in average deposits or increase in deposit expense, as applicable.

  • Asset quality - The allowance for credit losses on loans to total loans increased to 2.01% at September 30, 2020 from 1.80% and 0.85% at June 30, 2020 and September 30, 2019, respectively. Nonperforming assets to total assets was 0.53% at September 30, 2020 compared to 0.55% and 0.33% at June 30, 2020 and September 30, 2019, respectively. Improving economic forecasts in the current quarter reduced the provision for credit losses compared to the first and second quarters of this year. This improvement was offset by an increase in qualitative reserves established for certain loan portfolios, including hospitality and loans that have received principal and interest deferrals.
  • Deposits - Total deposits decreased $23.4 million, or 1.4% on an annualized basis, from the linked quarter to $6.7 billion as of September 30, 2020. Year-over-year, deposits grew $1.1 billion, or 18.7% on an annualized basis, from $5.6 billion as of September 30, 2019. Average deposits totaled $6.7 billion for the quarter ended September 30, 2020 compared to $6.6 billion and $5.6 billion for the linked and prior year quarters, respectively. Deposits attributable to PPP loan fundings primarily contributed to the growth in deposits over the prior year period. Noninterest deposit accounts represented 28.9% of total deposits at September 30, 2020, and the loan to deposit ratio was 91.8% at that date.
  • Capital - Total shareholders’ equity was $882.3 million and the tangible common equity to tangible assets ratio was 7.99% at September 30, 2020, compared to 7.81% at June 30, 2020. The Bank’s regulatory capital ratios remain “well-capitalized,” with a common equity tier 1 ratio of 12.0% and a total risk-based capital ratio of 13.3% as of September 30, 2020. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 10.2% and 14.6%, respectively, at September 30, 2020.

    The Company suspended its repurchase of shares through the share repurchase plan in March 2020. There are 95,907 shares available for repurchase under the existing authorization.

    The Company’s Board of Directors approved a quarterly dividend of $0.18 per common share, payable on December 31, 2020 to shareholders of record as of December 15, 2020.
  • Liquidity - The Company maintains a high level of both on-balance-sheet and off-balance-sheet liquidity. At September 30, 2020, on-balance-sheet liquidity consisted of cash and unpledged investment securities of $1.0 billion. Off-balance-sheet liquidity totaled $1.5 billion through the Federal Home Loan Bank, Federal Reserve and correspondent bank lines. The Company also has an unused $25 million revolving line of credit and maintains a shelf registration allowing for the issuance of various forms of equity and debt securities. The $63.3 million subordinated debt issuance in the second quarter 2020 also has enhanced the holding company’s liquidity position.

Net Interest Income

Average Balance Sheets

The following table presents, for the periods indicated, certain information related to our average interest-earning assets and interest-bearing liabilities, as well as, the corresponding interest rates earned and paid, all on a tax-equivalent basis.

 

Quarter ended

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

($ 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, excluding incremental accretion*

$

6,112,715

 

 

$

61,516

 

 

4.00

%

 

$

6,032,076

 

 

$

63,869

 

 

4.26

%

 

$

5,178,009

 

 

$

69,193

 

 

5.30

%

Debt and equity investments*

1,361,515

 

 

8,761

 

 

2.56

 

 

1,361,853

 

 

9,220

 

 

2.72

 

 

1,312,860

 

 

9,610

 

 

2.90

 

Short-term investments

295,854

 

 

113

 

 

0.15

 

 

177,267

 

 

87

 

 

0.20

 

 

113,214

 

 

572

 

 

2.00

 

Total earning assets

7,770,084

 

 

70,390

 

 

3.60

 

 

7,571,196

 

 

73,176

 

 

3.89

 

 

6,604,083

 

 

79,375

 

 

4.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

571,884

 

 

 

 

 

 

587,008

 

 

 

 

 

 

618,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

8,341,968

 

 

 

 

 

 

$

8,158,204

 

 

 

 

 

 

$

7,222,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

$

1,529,097

 

 

$

255

 

 

0.07

%

 

$

1,487,467

 

 

$

244

 

 

0.07

%

 

$

1,356,328

 

 

$

2,048

 

 

0.60

%

Money market accounts

1,981,026

 

 

1,003

 

 

0.20

 

 

1,941,874

 

 

995

 

 

0.21

 

 

1,639,603

 

 

6,959

 

 

1.68

 

Savings

605,475

 

 

45

 

 

0.03

 

 

590,104

 

 

45

 

 

0.03

 

 

548,109

 

 

232

 

 

0.17

 

Certificates of deposit

630,076

 

 

2,409

 

 

1.52

 

 

718,529

 

 

3,099

 

 

1.73

 

 

820,943

 

 

3,970

 

 

1.92

 

Total interest-bearing deposits

4,745,674

 

 

3,712

 

 

0.31

 

 

4,737,974

 

 

4,383

 

 

0.37

 

 

4,364,983

 

 

13,209

 

 

1.20

 

Subordinated debentures

203,438

 

 

2,826

 

 

5.53

 

 

169,311

 

 

2,316

 

 

5.50

 

 

141,136

 

 

1,956

 

 

5.50

 

FHLB advances

250,000

 

 

720

 

 

1.15

 

 

251,231

 

 

455

 

 

0.73

 

 

378,207

 

 

2,203

 

 

2.31

 

Securities sold under agreements to repurchase

199,308

 

 

59

 

 

0.12

 

 

192,117

 

 

57

 

 

0.12

 

 

155,238

 

 

327

 

 

0.84

 

Other borrowings

31,413

 

 

116

 

 

1.47

 

 

32,842

 

 

147

 

 

1.80

 

 

37,817

 

 

337

 

 

3.54

 

Total interest-bearing liabilities

5,429,833

 

 

7,433

 

 

0.54

 

 

5,383,475

 

 

7,358

 

 

0.55

 

 

5,077,381

 

 

18,032

 

 

1.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

1,920,694

 

 

 

 

 

 

1,813,760

 

 

 

 

 

 

1,232,360

 

 

 

 

 

Other liabilities

105,945

 

 

 

 

 

 

92,806

 

 

 

 

 

 

68,642

 

 

 

 

 

Total liabilities

7,456,472

 

 

 

 

 

 

7,290,041

 

 

 

 

 

 

6,378,383

 

 

 

 

 

Shareholders' equity

885,496

 

 

 

 

 

 

868,163

 

 

 

 

 

 

843,974

 

 

 

 

 

Total liabilities and shareholders' equity

$

8,341,968

 

 

 

 

 

 

$

8,158,204

 

 

 

 

 

 

$

7,222,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest income3

 

 

62,957

 

 

 

 

 

 

65,818

 

 

 

 

 

 

61,343

 

 

 

Core net interest margin3

 

 

 

 

3.22

%

 

 

 

 

 

3.50

%

 

 

 

 

 

3.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incremental accretion on non-core acquired loans

 

 

1,235

 

 

 

 

 

 

719

 

 

 

 

 

 

2,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

64,192

 

 

 

 

 

 

$

66,537

 

 

 

 

 

 

$

63,483

 

 

 

Net interest margin

 

 

 

 

3.29

%

 

 

 

 

 

3.53

%

 

 

 

 

 

3.81

%

* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $0.8 million for the three months ended September 30, 2020, $0.7 million for the three months ended June 30, 2020, and $0.4 million for the three months ended September 30, 2019.

3 Core net interest income and core NIM are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

Net interest income for the third quarter decreased $2.5 million to $63.4 million from $65.8 million in the linked quarter, and increased $0.3 million from the prior year period. NIM, on a tax equivalent basis, was 3.29% for the third quarter, compared to 3.53% in the linked quarter, and 3.81% in the third quarter of 2019. The decrease from the linked quarter was primarily due to slightly lower rates on non-PPP loans plus the impact of the low yield on PPP loans. Additionally, loan yields for non-PPP loans declined in the linked quarter due to both LIBOR resets as well as lower rates on new loans and renewing loans which, combined, impacted yields by 20 basis points.

Core net interest income and core NIM noted in the table below exclude incremental accretion on non-core acquired loans.

 

Quarter ended

($ in thousands)

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

September 30,
2019

Net interest income

$

63,354

 

 

$

65,833

 

 

$

63,368

 

 

$

61,613

 

 

$

63,046

 

Less: Incremental accretion income2

1,235

 

 

719

 

 

1,273

 

 

576

 

 

2,140

 

Core net interest income3

$

62,119

 

 

$

65,114

 

 

$

62,095

 

 

$

61,037

 

 

$

60,906

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (tax equivalent)

3.29

%

 

3.53

%

 

3.79

%

 

3.68

%

 

3.81

%

Core net interest margin3 (tax equivalent)

3.22

%

 

3.50

%

 

3.71

%

 

3.64

%

 

3.69

%

 

 

 

 

 

 

 

 

 

 

2 Represents incremental accretion income on non-core acquired loans which were acquired from the FDIC and previously covered by shared-loss agreements.

3 Core net interest income and core NIM are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

NIM decreased 24 basis points from the linked quarter to 3.29% during the current quarter primarily due to a 29 basis point decrease in earning asset yields. The decrease in the earning asset yield was primarily due to a combination of higher average balances on PPP loans (two bps), lower average balances for non-PPP loans (six bps), and an increase in short-term investment balances (five bps), combined with reduced investment (two bps) and loan (14 bps) yields, each as compared to the linked quarter. The full-quarter impact of $63.3 million of subordinated debentures issued during the second quarter negatively impacted NIM by an additional two basis points.

The cost of interest-bearing liabilities was relatively unchanged from the linked quarter. The Company responded to interest rate trends earlier in the year by reducing the cost of certain managed money market and interest-bearing transaction accounts. Increases in the cost of borrowings were offset by lower balances and rates on brokered and other time deposits.

Loans

The following table presents total loans for the most recent five quarters:

 

Quarter ended

($ in thousands)

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

September 30,
2019

C&I

$

1,080,860

 

 

$

1,057,899

 

 

$

1,186,240

 

 

$

1,186,667

 

 

$

1,174,569

 

CRE investor owned

1,284,351

 

 

1,302,235

 

 

1,319,316

 

 

1,290,258

 

 

1,281,332

 

CRE owner occupied

583,430

 

 

599,800

 

 

584,491

 

 

582,579

 

 

566,219

 

SBA PPP loans

819,100

 

 

807,814

 

 

 

 

 

 

 

Enterprise value lendinga

367,337

 

 

382,828

 

 

440,764

 

 

428,896

 

 

417,521

 

Life insurance premium financinga

517,559

 

 

520,705

 

 

496,471

 

 

472,822

 

 

468,051

 

Residential real estate

321,482

 

 

326,697

 

 

346,461

 

 

366,261

 

 

386,174

 

Construction and land development

450,225

 

 

455,686

 

 

445,909

 

 

428,681

 

 

403,590

 

Tax creditsa

368,908

 

 

363,222

 

 

354,046

 

 

294,210

 

 

265,626

 

Agriculture

190,969

 

 

191,093

 

 

168,237

 

 

139,873

 

 

136,249

 

Other

142,086

 

 

132,072

 

 

115,582

 

 

124,090

 

 

128,683

 

Total Loans

$

6,126,307

 

 

$

6,140,051

 

 

$

5,457,517

 

 

$

5,314,337

 

 

$

5,228,014

 

 

 

 

 

 

 

 

 

 

 

Total loan yield

4.08

%

 

4.31

%

 

5.06

%

 

5.08

%

 

5.47

%

Total C&I loans to total loansb

51

%

 

51

%

 

45

%

 

44

%

 

44

%

Variable interest rate loans to total loansb

50

%

 

51

%

 

60

%

 

59

%

 

60

%

 

Certain prior period amounts have been reclassified among the categories to conform to the current period presentation

a Specialized categories may include a mix of C&I, CRE, construction and land development, or other loans.

bRatios include the impact of PPP.

Loans totaled $6.1 billion at September 30, 2020, decreasing $13.7 million, or 0.9% on an annualized basis, compared to the linked quarter. Year-over-year, loans increased $898.3 million, or 17.2% on an annualized basis. The year-over-year increase was primarily due to PPP loans. The largest growth categories, excluding PPP, compared to the linked quarter were C&I, other, and tax credits. New loan originations, excluding PPP, and revolving line advances increased during the quarter from the linked quarter, offset by accelerated loan paydowns. Line draw utilization continues to decline. At September 30, 2020 utilization was 40.1% compared to 40.3% and 49.5% at June 30, 2020 and March 31, 2020, respectively.

The Company has implemented several loan programs to assist its customers impacted by the COVID-19 pandemic. These programs include consumer and business deferral programs and expanded small business lines of credit.

The following table presents loan modifications currently in a deferral status at the periods presented:

 

Quarter ended

($ in thousands)

September 30, 2020

 

June 30, 2020

Commercial real estate

$

48,081

 

 

$

404,295

 

Commercial and industrial

46,041

 

 

171,108

 

Construction real estate

44,243

 

 

88,369

 

Residential real estate

974

 

 

21,762

 

Other

12

 

 

134

 

Total loan modifications

$

139,351

 

 

$

685,668

 

 

 

 

 

Percentage of total loans

2

%

 

11

%

Asset Quality

The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:

 

Quarter ended

($ in thousands)

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

September 30,
2019

Nonperforming loans

$

39,623

 

 

$

41,473

 

 

$

37,204

 

 

$

26,425

 

 

$

15,569

 

Other real estate

4,835

 

 

4,874

 

 

5,072

 

 

6,344

 

 

8,498

 

Nonperforming assets

$

44,458

 

 

$

46,347

 

 

$

42,276

 

 

$

32,769

 

 

$

24,067

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

0.65

%

 

0.68

%

 

0.68

%

 

0.50

%

 

0.30

%

Nonperforming assets to total assets

0.53

%

 

0.55

%

 

0.56

%

 

0.45

%

 

0.33

%

Allowance for loan losses to total loans

2.01

%

 

1.80

%

 

1.69

%

 

0.81

%

 

0.85

%

Net charge-offs

$

1,027

 

 

$

309

 

 

$

1,183

 

 

$

2,544

 

 

$

1,070

 

Nonperforming loans decreased $1.9 million to $39.6 million at September 30, 2020 from $41.5 million at June 30, 2020. Activity during the current quarter primarily included additions of $10.5 million, paydowns of $9.7 million, and charge-offs of $2.6 million. The addition of $10.5 million during the quarter was primarily from one $8.7 million hotel loan that went on nonaccrual. Other real estate decreased slightly during the third quarter 2020 due to write-downs and sales of $0.3 million offset by one addition of $0.3 million.

The Company recorded a provision for credit losses of $14.1 million for the third quarter 2020 compared to $19.6 million for the linked quarter and $1.8 million for the prior year quarter. The provision for credit losses in the third quarter 2020 was primarily due an increase in individual reserves and qualitative reserves for certain higher-risk loan portfolios. To the extent that the Company does not recognize charge-offs and economic forecasts improve in future periods, the Company could recognize a reversal of provision for credit losses. Conversely, if economic conditions and the Company’s forecast continue to worsen, the Company could recognize elevated levels of provision for credit losses.

Deposits

The following table presents deposits broken out by type for the most recent five quarters:

 

Quarter ended

($ in thousands)

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

September 30,
2019

Noninterest-bearing accounts

$

1,929,540

 

 

$

1,965,868

 

 

$

1,354,571

 

 

$

1,327,348

 

 

$

1,295,450

 

Interest-bearing transaction accounts

1,499,756

 

 

1,508,535

 

 

1,389,603

 

 

1,367,444

 

 

1,307,855

 

Money market and savings accounts

2,634,885

 

 

2,566,011

 

 

2,479,828

 

 

2,249,784

 

 

2,201,052

 

Brokered certificates of deposit

65,209

 

 

85,414

 

 

170,667

 

 

215,758

 

 

209,754

 

Other certificates of deposit

546,836

 

 

573,752

 

 

595,237

 

 

610,689

 

 

610,269

 

Total deposit portfolio

$

6,676,226

 

 

$

6,699,580

 

 

$

5,989,906

 

 

$

5,771,023

 

 

$

5,624,380

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits to total deposits

28.9

%

 

29.3

%

 

22.6

%

 

23.0

%

 

23.0

%

Total deposits at September 30, 2020 were $6.7 billion, a decrease of $23.4 million from June 30, 2020, and an increase of $1.1 billion from September 30, 2019.

Core deposits, defined as total deposits excluding certificates of deposits, were $6.1 billion at September 30, 2020, an increase of $23.8 million from the linked quarter. Money market and savings accounts increased $68.9 million as compared to the linked quarter while all other accounts declined. Noninterest-bearing deposits were $1.9 billion at September 30, 2020, a decrease of $36.3 million compared to June 30, 2020, and an increase of $634.1 million compared to September 30, 2019. Certificates of deposit decreased $47.1 million from the linked quarter and $208.0 million from the prior year quarter. The total cost of deposits was 0.22% for the current quarter compared to 0.27% and 0.94% for the linked quarter and prior year quarter, respectively.

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,
2020

 

June 30,
2020

 

Increase (decrease)

 

September 30,
2019

 

Increase (decrease)

Service charges on deposit accounts

$

2,798

 

 

$

2,616

 

 

$

182

 

 

7

%

 

$

3,246

 

 

$

(448

)

 

(14

)%

Wealth management revenue

2,456

 

 

2,326

 

 

130

 

 

6

%

 

2,661

 

 

(205

)

 

(8

)%

Card services revenue

2,498

 

 

2,225

 

 

273

 

 

12

%

 

2,494

 

 

4

 

 

%

Tax credit income

748

 

 

(221

)

 

969

 

 

438

%

 

1,238

 

 

(490

)

 

(40

)%

Miscellaneous income

4,129

 

 

3,014

 

 

1,115

 

 

37

%

 

3,925

 

 

204

 

 

5

%

Total noninterest income

$

12,629

 

 

$

9,960

 

 

$

2,669

 

 

27

%

 

$

13,564

 

 

$

(935

)

 

(7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income for third quarter 2020 was $12.6 million, an increase of $2.7 million from the linked quarter and a decrease of $0.9 million from the prior year quarter. The increase from the linked quarter was primarily due to improved transaction volumes for deposit service charges and card services, increased tax credit income and continued growth in mortgage revenue.

Noninterest Expenses

Noninterest expense was $39.5 million for the third quarter 2020, compared to $37.9 million for the linked quarter, and $38.2 million for the third quarter 2019. The increase from the linked quarter and prior year quarter was primarily due to merger-related expenses of $1.6 million.

For the third quarter 2020, the Company’s efficiency ratio was 52.0% compared to 50.0% and 49.9% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio4 was 51.0% for the quarter ended September 30, 2020, compared to 50.7% for the linked quarter and 51.7% for the prior year quarter.

4 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

Income Taxes

The Company’s effective tax rate was 20% for each of the quarters ended September 30, 2020, the linked quarter and prior year quarter.

Capital

The following table presents various EFSC capital ratios:

 

Quarter ended

Percent

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

September 30,
2019

Total risk-based capital to risk-weighted assets

14.6

%

 

14.4

%

 

12.9

%

 

12.9

%

 

12.7

%

Tier 1 capital to risk weighted assets

11.6

%

 

11.4

%

 

11.0

%

 

11.4

%

 

11.2

%

Common equity tier 1 capital to risk-weighted assets

10.2

%

 

9.9

%

 

9.6

%

 

9.9

%

 

9.6

%

Tangible common equity to tangible assets5

8.0

%

 

7.8

%

 

8.4

%

 

8.9

%

 

8.5

%

 

 

 

 

 

 

 

 

 

 

5 Tangible common equity to tangible assets is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

The Company’s strong earnings profile continues to build total capital even with the elevated level of provision for credit losses in 2020. The growth in the balance sheet due to PPP did not negatively impact the Company’s regulatory capital ratios due to the SBA guarantee. The issuance of subordinated debt during the second quarter of 2020 enhanced total risk-based capital. 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 other financial measures, such as core net interest income, core net interest margin, tangible common equity, core efficiency ratios, ROATCE, PPNR, financial metrics adjusted for PPP impact, and the tangible common equity ratio, 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 core net interest income, core net interest margin, core efficiency ratio, ROATCE, PPNR, financial metrics adjusted for PPP impact, and the tangible common equity ratio, 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 non-core acquired loans, which were acquired from the FDIC and previously covered by shared-loss agreements, and the related income and expenses, the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures include contractual interest on non-core acquired loans, but exclude incremental accretion on these loans. Core performance measures also exclude expenses directly related to non-core acquired loans. Core performance measures also exclude certain other income and expense items, such as merger related expenses, facilities charges, and the gain or loss on sale of investment securities, 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 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 20, 2020. During the call, management will review the third quarter of 2020 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 1-800-353-6461 (Conference ID #6978860). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC3Q2020earnings and register to receive a dial in number, passcode, and pin number. The replay will be available for approximately two weeks following the conference call.

About Enterprise

Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $8 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 34 branch offices in Arizona, Kansas, Missouri and New Mexico. 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.

On August 20, 2020, the Company and its wholly-owned subsidiary bank, Enterprise Bank & Trust, entered into a definitive agreement with Seacoast Commerce Banc Holdings (“Seacoast”) and its wholly-owned bank subsidiary, Seacoast Commerce Bank (“Seacoast Bank”), pursuant to which the Company will acquire Seacoast and Seacoast Bank. Pursuant to the terms of the definitive agreement, upon consummation of the proposed transaction, Seacoast shareholders will receive 0.5061 shares of EFSC common stock for each share of Seacoast common stock they hold. Headquartered in San Diego, California, Seacoast had approximately $1.3 billion in total assets, $1.1 billion in loans, and $1.0 billion in deposits as of June 30, 2020 and operates four full-service banking offices in San Diego, California and one in Las Vegas, Nevada. In addition, Seacoast has 20 loan production offices and six deposit production offices across the country. As of June 30, 2020, Seacoast Bank was ranked as the 8th largest Small Business Administration lender in the nation and has a history of both strong revenue and earnings growth in recent years. The proposed transaction has been approved by the Federal Reserve and FDIC, and remains subject to the approval of Seacoast’s shareholders. The Company expects to consummate the proposed transaction in the fourth quarter of 2020.

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 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, yields and returns, loan diversification and credit management, shareholder value creation and the impact of the Seacoast acquisition and other acquisitions.

Forward-looking statements include, but are not limited to, statements about the Company’s plans, expectations, and projections of future financial and operating results, as well as statements regarding the Company’s plans, objectives, expectations or consequences of announced transactions. The Company uses words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “could,” “continue,” and “intend”, and variations of such words and similar expressions, in this release to identify such forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors that could cause or contribute to such differences include, but are not limited to, the Company’s ability to efficiently integrate acquisitions, including the Seacoast acquisition, 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 conditions, risks associated with rapid increases or decreases in prevailing interest rates, 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 regulatory requirements, changes in accounting policies and practices or accounting standards, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss (“CECL”) model, which changed how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption on January 1, 2020, uncertainty regarding the future of LIBOR, natural disasters, war or terrorist activities, or pandemics, or the outbreak of COVID-19 or similar outbreaks, and their effects on economic and business environments in which we operate, as well as other risk factors described in the Company’s 2019 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events unless required under the federal securities laws.

Notice to Seacoast Shareholders

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

In connection with EFSC’s proposed acquisition of Seacoast, EFSC filed a registration statement on Form S-4 (File No. 333-248758) (the “Registration Statement”) with the SEC. The Registration Statement includes a preliminary proxy statement of Seacoast and a preliminary prospectus of EFSC, which are jointly referred to as the proxy statement/prospectus, as well as other relevant documents concerning the proposed transaction. The Registration Statement was declared effective by the SEC on September 28, 2020.

SHAREHOLDERS OF SEACOAST ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE ACQUISITION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION AND RELATED MATTERS.

The final proxy statement/prospectus was mailed to Seacoast’s shareholders of recorded as of the close of business on September 24, 2020. Investors and security holders will be able to obtain the Registration Statement, the proxy statement/prospectus, and any other documents EFSC has filed with the SEC, free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by EFSC are available free of charge by (1) accessing EFSC’s website at www.enterprisebank.com under the “Investor Relations” link, (2) writing EFSC at 150 North Meramec, Clayton, Missouri 63105, Attention: Investor Relations, or (3) writing Seacoast at 11939 Rancho Bernardo Road, Suite 200, San Diego, CA 92128, Attention: Chief Financial Officer.

Participants in Solicitation

EFSC and Seacoast and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Seacoast in connection with the proposed merger. Information about the directors and executive officers of EFSC is set forth in the proxy statement for EFSC’s 2020 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 25, 2020 and as amended by supplements to the proxy statement filed with the SEC on March 25, 2020 and April 15, 2020. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed acquisition. Free copies of this document may be obtained as described in the preceding paragraph.

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited)

 

 

Quarter ended

 

Nine Months ended

(in thousands, except per share data)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

 

Sep 30,
2020

 

Sep 30,
2019

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

63,354

 

 

$

65,833

 

 

$

63,368

 

 

$

61,613

 

 

$

63,046

 

 

$

192,555

 

 

$

177,104

 

Provision for credit losses

14,080

 

 

19,591

 

 

22,264

 

 

1,341

 

 

1,833

 

 

55,935

 

 

5,031

 

Noninterest income

12,629

 

 

9,960

 

 

13,408

 

 

14,418

 

 

13,564

 

 

35,997

 

 

34,758

 

Noninterest expense

39,524

 

 

37,912

 

 

38,673

 

 

38,354

 

 

38,239

 

 

116,109

 

 

127,131

 

Income before income tax expense

22,379

 

 

18,290

 

 

15,839

 

 

36,336

 

 

36,538

 

 

56,508

 

 

79,700

 

Income tax expense

4,428

 

 

3,656

 

 

2,971

 

 

7,246

 

 

7,469

 

 

11,055

 

 

16,051

 

Net income

$

17,951

 

 

$

14,634

 

 

$

12,868

 

 

$

29,090

 

 

$

29,069

 

 

$

45,453

 

 

$

63,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.68

 

 

$

0.56

 

 

$

0.48

 

 

$

1.09

 

 

$

1.08

 

 

$

1.73

 

 

$

2.45

 

Return on average assets

0.86

%

 

0.72

%

 

0.70

%

 

1.58

%

 

1.60

%

 

0.76

%

 

1.26

%

Return on average common equity

8.06

%

 

6.78

%

 

5.98

%

 

13.43

%

 

13.66

%

 

6.96

%

 

11.00

%

Return on average tangible common equity

10.94

%

 

9.28

%

 

8.22

%

 

18.54

%

 

19.08

%

 

9.51

%

 

15.16

%

Net interest margin (tax equivalent)

3.29

%

 

3.53

%

 

3.79

%

 

3.68

%

 

3.81

%

 

3.52

%

 

3.85

%

Core net interest margin (tax equivalent)1

3.22

%

 

3.50

%

 

3.71

%

 

3.64

%

 

3.69

%

 

3.47

%

 

3.76

%

Efficiency ratio

52.02

%

 

50.02

%

 

50.37

%

 

50.45

%

 

49.91

%

 

50.80

%

 

60.01

%

Core efficiency ratio1

51.04

%

 

50.66

%

 

51.21

%

 

50.73

%

 

51.73

%

 

50.97

%

 

52.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

8,367,976

 

 

$

8,357,501

 

 

$

7,500,643

 

 

$

7,333,791

 

 

$

7,346,791

 

 

 

 

 

Total average assets

8,341,968

 

 

8,158,204

 

 

7,363,605

 

 

7,322,496

 

 

7,222,357

 

 

$

7,956,006

 

 

$

6,749,988

 

Total deposits

6,676,226

 

 

6,699,580

 

 

5,989,906

 

 

5,771,023

 

 

5,624,380

 

 

 

 

 

Total average deposits

6,666,368

 

 

6,551,734

 

 

5,837,717

 

 

5,756,292

 

 

5,597,343

 

 

6,353,087

 

 

5,296,257

 

Period end common shares outstanding

26,210

 

 

26,196

 

 

26,161

 

 

26,543

 

 

26,613

 

 

 

 

 

Dividends per common share

$

0.18

 

 

$

0.18

 

 

$

0.18

 

 

$

0.17

 

 

$

0.16

 

 

$

0.54

 

 

$

0.45

 

Tangible book value per common share

$

24.80

 

 

$

24.22

 

 

$

23.38

 

 

$

23.76

 

 

$

22.82

 

 

 

 

 

Tangible common equity to tangible assets1

7.99

%

 

7.81

%

 

8.42

%

 

8.89

%

 

8.54

%

 

 

 

 

Total risk-based capital to risk-weighted assets

14.6

%

 

14.4

%

 

12.8

%

 

12.9

%

 

12.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

 

Nine Months ended

($ in thousands, except per share data)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

 

Sep 30,
2020

 

Sep 30,
2019

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

$

70,787

 

 

$

73,191

 

 

$

76,688

 

 

$

77,238

 

 

$

81,078

 

 

$

220,666

 

 

$

227,896

 

Total interest expense

7,433

 

 

7,358

 

 

13,320

 

 

15,625

 

 

18,032

 

 

28,111

 

 

50,792

 

Net interest income

63,354

 

 

65,833

 

 

63,368

 

 

61,613

 

 

63,046

 

 

192,555

 

 

177,104

 

Provision for credit losses

14,080

 

 

19,591

 

 

22,264

 

 

1,341

 

 

1,833

 

 

55,935

 

 

5,031

 

Net interest income after provision for credit losses

49,274

 

 

46,242

 

 

41,104

 

 

60,272

 

 

61,213

 

 

136,620

 

 

172,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit service charges

2,798

 

 

2,616

 

 

3,143

 

 

3,254

 

 

3,246

 

 

8,557

 

 

9,547

 

Wealth management revenue

2,456

 

 

2,326

 

 

2,501

 

 

2,618

 

 

2,661

 

 

7,283

 

 

7,314

 

Card services revenue

2,498

 

 

2,225

 

 

2,247

 

 

2,409

 

 

2,494

 

 

6,970

 

 

6,745

 

Tax credit income

748

 

 

(221)

 

 

2,036

 

 

3,425

 

 

1,238

 

 

2,563

 

 

1,968

 

Other income

4,129

 

 

3,014

 

 

3,481

 

 

2,712

 

 

3,925

 

 

10,624

 

 

9,184

 

Total noninterest income

12,629

 

 

9,960

 

 

13,408

 

 

14,418

 

 

13,564

 

 

35,997

 

 

34,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

22,040

 

 

22,389

 

 

21,685

 

 

20,411

 

 

20,845

 

 

66,114

 

 

60,884

 

Occupancy

3,408

 

 

3,185

 

 

3,347

 

 

3,461

 

 

3,179

 

 

9,940

 

 

9,004

 

Merger-related expenses

1,563

 

 

 

 

 

 

 

 

393

 

 

1,563

 

 

17,969

 

Other

12,513

 

 

12,338

 

 

13,641

 

 

14,482

 

 

13,822

 

 

38,492

 

 

39,274

 

Total noninterest expense

39,524

 

 

37,912

 

 

38,673

 

 

38,354

 

 

38,239

 

 

116,109

 

 

127,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

22,379

 

 

18,290

 

 

15,839

 

 

36,336

 

 

36,538

 

 

56,508

 

 

79,700

 

Income tax expense

4,428

 

 

3,656

 

 

2,971

 

 

7,246

 

 

7,469

 

 

11,055

 

 

16,051

 

Net income

$

17,951

 

 

$

14,634

 

 

$

12,868

 

 

$

29,090

 

 

$

29,069

 

 

$

45,453

 

 

$

63,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.68

 

 

$

0.56

 

 

$

0.49

 

 

$

1.10

 

 

$

1.09

 

 

$

1.73

 

 

$

2.46

 

Diluted earnings per share

$

0.68

 

 

$

0.56

 

 

$

0.48

 

 

$

1.09

 

 

$

1.08

 

 

$

1.73

 

 

$

2.45

 

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

98,816

 

 

$

100,804

 

 

$

98,619

 

 

$

74,769

 

 

$

153,730

 

Interest-earning deposits

301,773

 

 

254,830

 

 

88,794

 

 

96,217

 

 

106,747

 

Debt and equity investments

1,375,931

 

 

1,387,001

 

 

1,382,149

 

 

1,354,527

 

 

1,354,986

 

Loans held for sale

14,032

 

 

16,029

 

 

8,430

 

 

5,570

 

 

6,281

 

 

 

 

 

 

 

 

 

 

 

Loans

6,126,307

 

 

6,140,051

 

 

5,457,517

 

 

5,314,337

 

 

5,228,014

 

Less: Allowance for loan losses

123,270

 

 

110,270

 

 

92,187

 

 

43,288

 

 

44,555

 

Total loans, net

6,003,037

 

 

6,029,781

 

 

5,365,330

 

 

5,271,049

 

 

5,183,459

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net

56,807

 

 

58,231

 

 

59,358

 

 

60,013

 

 

59,216

 

Goodwill

210,344

 

 

210,344

 

 

210,344

 

 

210,344

 

 

211,251

 

Intangible assets, net

21,820

 

 

23,196

 

 

24,585

 

 

26,076

 

 

27,626

 

Other assets

285,416

 

 

277,285

 

 

263,034

 

 

235,226

 

 

243,495

 

Total assets

$

8,367,976

 

 

$

8,357,501

 

 

$

7,500,643

 

 

$

7,333,791

 

 

$

7,346,791

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

1,929,540

 

 

$

1,965,868

 

 

$

1,354,571

 

 

$

1,327,348

 

 

$

1,295,450

 

Interest-bearing deposits

4,746,686

 

 

4,733,712

 

 

4,635,335

 

 

4,443,675

 

 

4,328,930

 

Total deposits

6,676,226

 

 

6,699,580

 

 

5,989,906

 

 

5,771,023

 

 

5,624,380

 

Subordinated debentures

203,510

 

 

203,384

 

 

141,336

 

 

141,258

 

 

141,179

 

FHLB advances

250,000

 

 

250,000

 

 

222,000

 

 

222,406

 

 

461,426

 

Other borrowings

239,038

 

 

227,961

 

 

205,918

 

 

265,172

 

 

199,634

 

Other liabilities

116,935

 

 

108,613

 

 

95,047

 

 

66,747

 

 

74,077

 

Total liabilities

7,485,709

 

 

7,489,538

 

 

6,654,207

 

 

6,466,606

 

 

6,500,696

 

Shareholders’ equity

882,267

 

 

867,963

 

 

846,436

 

 

867,185

 

 

846,095

 

Total liabilities and shareholders’ equity

$

8,367,976

 

 

$

8,357,501

 

 

$

7,500,643

 

 

$

7,333,791

 

 

$

7,346,791

 

Average Balance Sheets

The following table presents, for the periods indicated, certain information related to our average interest-earning assets and interest-bearing liabilities, as well as, the corresponding interest rates earned and paid, all on a tax equivalent basis.

 

Nine Months ended

 

September 30, 2020

 

September 30, 2019

($ in thousands)

Average
Balance

 

Interest
Income/
Expense

 

Average
Yield/
Rate

 

Average
Balance

 

Interest
Income/
Expense

 

Average
Yield/
Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, excluding incremental accretion*

$

5,833,368

 

 

$

191,403

 

 

4.38

%

 

$

4,930,635

 

 

$

197,996

 

 

5.37

%

Debt and equity investments*

1,356,796

 

 

27,688

 

 

2.73

 

 

1,153,632

 

 

25,055

 

 

2.90

 

Short-term investments

188,849

 

 

500

 

 

0.35

 

 

108,930

 

 

1,722

 

 

2.11

 

Total earning assets

7,379,013

 

 

219,591

 

 

3.98

 

 

6,193,197

 

 

224,773

 

 

4.85

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

576,993

 

 

 

 

 

 

556,791

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

7,956,006

 

 

 

 

 

 

$

6,749,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

$

1,464,144

 

 

$

1,836

 

 

0.17

%

 

$

1,273,591

 

 

$

5,972

 

 

0.63

%

Money market accounts

1,911,584

 

 

6,738

 

 

0.47

 

 

1,579,702

 

 

20,470

 

 

1.73

 

Savings

579,619

 

 

233

 

 

0.05

 

 

471,024

 

 

646

 

 

0.18

 

Certificates of deposit

713,633

 

 

9,176

 

 

1.72

 

 

783,182

 

 

11,060

 

 

1.89

 

Total interest-bearing deposits

4,668,980

 

 

17,983

 

 

0.51

 

 

4,107,499

 

 

38,148

 

 

1.24

 

Subordinated debentures

171,465

 

 

7,061

 

 

5.50

 

 

135,512

 

 

5,562

 

 

5.49

 

FHLB advances

240,596

 

 

2,070

 

 

1.15

 

 

286,267

 

 

5,297

 

 

2.47

 

Securities sold under agreements to repurchase

197,776

 

 

479

 

 

0.32

 

 

168,740

 

 

939

 

 

0.74

 

Other borrowed funds

32,836

 

 

518

 

 

2.11

 

 

31,102

 

 

846

 

 

3.64

 

Total interest-bearing liabilities

5,311,653

 

 

28,111

 

 

0.71

 

 

4,729,120

 

 

50,792

 

 

1.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

1,684,107

 

 

 

 

 

 

1,188,758

 

 

 

 

 

Other liabilities

87,302

 

 

 

 

 

 

58,267

 

 

 

 

 

Total liabilities

7,083,062

 

 

 

 

 

 

5,976,145

 

 

 

 

 

Shareholders' equity

872,944

 

 

 

 

 

 

773,843

 

 

 

 

 

Total liabilities and shareholders' equity

$

7,956,006

 

 

 

 

 

 

$

6,749,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest income1

 

 

191,480

 

 

 

 

 

 

173,981

 

 

 

Core net interest margin1

 

 

 

 

3.47

%

 

 

 

 

 

3.76

%

 

 

 

 

 

 

 

 

 

 

 

 

Incremental accretion on non-core acquired loans

 

 

3,227

 

 

 

 

 

 

4,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

194,707

 

 

 

 

 

 

$

178,188

 

 

 

Net interest margin

 

 

 

 

3.52

%

 

 

 

 

 

3.85

%

* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $2.2 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

LOAN PORTFOLIO

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

3,152,394

 

 

$

3,143,197

 

 

$

2,469,013

 

 

$

2,361,157

 

 

$

2,303,495

 

Commercial real estate

2,027,886

 

 

2,048,444

 

 

2,048,357

 

 

1,997,321

 

 

1,967,888

 

Construction real estate

474,727

 

 

481,221

 

 

469,627

 

 

457,273

 

 

433,486

 

Residential real estate

321,792

 

 

326,992

 

 

346,758

 

 

366,261

 

 

386,173

 

Other

149,508

 

 

140,197

 

 

123,762

 

 

132,325

 

 

136,972

 

Total loans

$

6,126,307

 

 

$

6,140,051

 

 

$

5,457,517

 

 

$

5,314,337

 

 

$

5,228,014

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT PORTFOLIO

 

 

 

 

 

 

 

 

 

Noninterest-bearing accounts

$

1,929,540

 

 

$

1,965,868

 

 

$

1,354,571

 

 

$

1,327,348

 

 

$

1,295,450

 

Interest-bearing transaction accounts

1,499,756

 

 

1,508,535

 

 

1,389,603

 

 

1,367,444

 

 

1,307,855

 

Money market and savings accounts

2,634,885

 

 

2,566,011

 

 

2,479,828

 

 

2,249,784

 

 

2,201,052

 

Brokered certificates of deposit

65,209

 

 

85,414

 

 

170,667

 

 

215,758

 

 

209,754

 

Other certificates of deposit

546,836

 

 

573,752

 

 

595,237

 

 

610,689

 

 

610,269

 

Total deposit portfolio

$

6,676,226

 

 

$

6,699,580

 

 

$

5,989,906

 

 

$

5,771,023

 

 

$

5,624,380

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

Total loans

$

6,112,715

 

 

$

6,032,076

 

 

$

5,352,243

 

 

$

5,279,500

 

 

$

5,178,009

 

Debt and equity investments

1,361,515

 

 

1,361,853

 

 

1,346,968

 

 

1,322,017

 

 

1,312,860

 

Interest-earning assets

7,770,084

 

 

7,571,196

 

 

6,791,459

 

 

6,704,506

 

 

6,604,083

 

Total assets

8,341,968

 

 

8,158,204

 

 

7,363,605

 

 

7,322,496

 

 

7,222,357

 

Deposits

6,666,368

 

 

6,551,734

 

 

5,837,717

 

 

5,756,292

 

 

5,597,343

 

Shareholders’ equity

885,496

 

 

868,163

 

 

865,035

 

 

859,674

 

 

843,974

 

Tangible common equity1

652,663

 

 

633,946

 

 

629,390

 

 

622,502

 

 

604,331

 

 

 

 

 

 

 

 

 

 

 

YIELDS (tax equivalent)

 

 

 

 

 

 

 

 

 

Total loans

4.08

%

 

4.31

%

 

5.06

%

 

5.08

%

 

5.47

%

Debt and equity investments

2.56

 

 

2.72

 

 

2.90

 

 

2.91

 

 

2.90

 

Interest-earning assets

3.67

 

 

3.93

 

 

4.58

 

 

4.60

 

 

4.90

 

Interest-bearing deposits

0.31

 

 

0.37

 

 

0.88

 

 

1.05

 

 

1.20

 

Total deposits

0.22

 

 

0.27

 

 

0.68

 

 

0.81

 

 

0.94

 

Subordinated debentures

5.53

 

 

5.50

 

 

5.46

 

 

5.46

 

 

5.50

 

FHLB advances and other borrowed funds

0.74

 

 

0.56

 

 

1.33

 

 

1.57

 

 

1.99

 

Interest-bearing liabilities

0.54

 

 

0.55

 

 

1.05

 

 

1.23

 

 

1.41

 

Net interest margin

3.29

 

 

3.53

 

 

3.79

 

 

3.68

 

 

3.81

 

1Refer to Reconciliations of Non-GAAP Financial Measures table 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,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

ASSET QUALITY

 

 

 

 

 

 

 

 

 

Net charge-offs

$

1,027

 

 

$

309

 

 

$

1,183

 

 

$

2,544

 

 

$

1,070

 

Nonperforming loans

39,623

 

 

41,473

 

 

37,204

 

 

26,425

 

 

15,569

 

Classified assets

84,710

 

 

96,678

 

 

104,754

 

 

85,897

 

 

93,984

 

Nonperforming loans to total loans

0.65

%

 

0.68

%

 

0.68

%

 

0.50

%

 

0.30

%

Nonperforming assets to total assets

0.53

%

 

0.55

%

 

0.56

%

 

0.45

%

 

0.33

%

Allowance for loan losses to total loans

2.01

%

 

1.80

%

 

1.69

%

 

0.81

%

 

0.85

%

Allowance for loan losses to nonperforming loans

311.1

%

 

265.9

%

 

247.8

%

 

163.8

%

 

286.2

%

Net charge-offs to average loans (annualized)

0.07

%

 

0.02

%

 

0.09

%

 

0.19

%

 

0.08

%

 

 

 

 

 

 

 

 

 

 

WEALTH MANAGEMENT

 

 

 

 

 

 

 

 

 

Trust assets under management

$

1,641,980

 

 

$

1,602,358

 

 

$

1,445,521

 

 

$

1,671,082

 

 

$

1,583,260

 

Trust assets under administration

2,433,026

 

 

2,455,111

 

 

2,139,673

 

 

2,524,478

 

 

2,404,950

 

 

 

 

 

 

 

 

 

 

 

MARKET DATA

 

 

 

 

 

 

 

 

 

Book value per common share

$

33.66

 

 

$

33.13

 

 

$

32.36

 

 

$

32.67

 

 

$

31.79

 

Tangible book value per common share1

$

24.80

 

 

$

24.22

 

 

$

23.38

 

 

$

23.76

 

 

$

22.82

 

Market value per share

$

27.27

 

 

$

31.12

 

 

$

27.91

 

 

$

48.21

 

 

$

40.75

 

Period end common shares outstanding

26,210

 

 

26,196

 

 

26,161

 

 

26,543

 

 

26,613

 

Average basic common shares

26,217

 

 

26,180

 

 

26,473

 

 

26,540

 

 

26,778

 

Average diluted common shares

26,228

 

 

26,195

 

 

26,539

 

 

26,668

 

 

26,868

 

 

 

 

 

 

 

 

 

 

 

CAPITAL

 

 

 

 

 

 

 

 

 

Total risk-based capital to risk-weighted assets

14.6

%

 

14.4

%

 

12.9

%

 

12.9

%

 

12.7

%

Tier 1 capital to risk-weighted assets

11.6

%

 

11.4

%

 

11.0

%

 

11.4

%

 

11.2

%

Common equity tier 1 capital to risk-weighted assets

10.2

%

 

9.9

%

 

9.6

%

 

9.9

%

 

9.6

%

Tangible common equity to tangible assets1

8.0

%

 

7.8

%

 

8.4

%

 

8.9

%

 

8.5

%

1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

 

ENTERPRISE FINANCIAL SERVICES CORP

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

 

Quarter ended

 

Nine Months ended

($ in thousands)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

 

Sep 30,
2020

 

Sep 30,
2019

CORE PERFORMANCE MEASURES

 

 

 

 

Net interest income

$

63,354

 

 

$

65,833

 

 

$

63,368

 

 

$

61,613

 

 

$

63,046

 

 

$

192,555

 

 

$

177,104

 

Less: Incremental accretion income

1,235

 

 

719

 

 

1,273

 

 

576

 

 

2,140

 

 

3,227

 

 

4,207

 

Core net interest income

62,119

 

 

65,114

 

 

62,095

 

 

61,037

 

 

60,906

 

 

189,328

 

 

172,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

12,629

 

 

9,960

 

 

13,408

 

 

14,418

 

 

13,564

 

 

35,997

 

 

34,758

 

Less: Other income from non-core acquired assets

 

 

 

 

 

 

4

 

 

1,001

 

 

 

 

1,368

 

Less: Gain on sale of investment securities

417

 

 

 

 

4

 

 

(94)

 

 

337

 

 

421

 

 

337

 

Less: Other non-core income

 

 

265

 

 

 

 

 

 

 

 

265

 

 

266

 

Core noninterest income

12,212

 

 

9,695

 

 

13,404

 

 

14,508

 

 

12,226

 

 

35,311

 

 

32,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total core revenue

74,331

 

 

74,809

 

 

75,499

 

 

75,545

 

 

73,132

 

 

224,639

 

 

205,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

39,524

 

 

37,912

 

 

38,673

 

 

38,354

 

 

38,239

 

 

116,109

 

 

127,131

 

Less: Other expenses related to non-core acquired loans

25

 

 

12

 

 

12

 

 

33

 

 

18

 

 

49

 

 

224

 

Less: Merger-related expenses

1,563

 

 

 

 

 

 

 

 

393

 

 

1,563

 

 

17,969

 

Core noninterest expense

37,936

 

 

37,900

 

 

38,661

 

 

38,321

 

 

37,828

 

 

114,497

 

 

108,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core efficiency ratio

51.04

%

 

50.66

%

 

51.21

%

 

50.73

%

 

51.73

%

 

50.97

%

 

52.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (TAX EQUIVALENT)

Net interest income

$

64,192

 

 

$

66,537

 

 

$

63,978

 

 

$

62,141

 

 

$

63,483

 

 

$

194,707

 

 

$

178,188

 

Less: Incremental accretion income

1,235

 

 

719

 

 

1,273

 

 

576

 

 

2,140

 

 

3,227

 

 

4,207

 

Core net interest income

$

62,957

 

 

$

65,818

 

 

$

62,705

 

 

$

61,565

 

 

$

61,343

 

 

$

191,480

 

 

$

173,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

7,770,084

 

 

$

7,571,196

 

 

$

6,791,459

 

 

$

6,704,506

 

 

$

6,604,083

 

 

$

7,379,012

 

 

$

6,193,197

 

Reported net interest margin

3.29

%

 

3.53

%

 

3.79

%

 

3.68

%

 

3.81

%

 

3.52

%

 

3.85

%

Core net interest margin

3.22

%

 

3.50

%

 

3.71

%

 

3.64

%

 

3.69

%

 

3.47

%

 

3.76

%

 

 

Quarter ended

($ in thousands)

Sep 30,
2020

 

Jun 30,
2020

 

Mar 31,
2020

 

Dec 31,
2019

 

Sep 30,
2019

SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS

Shareholders’ equity

$

882,267

 

 

$

867,963

 

 

$

846,436

 

 

$

867,185

 

 

$

846,095

 

Less: Goodwill

210,344

 

 

210,344

 

 

210,344

 

 

210,344

 

 

211,251

 

Less: Intangible assets

21,820

 

 

23,196

 

 

24,585

 

 

26,076

 

 

27,626

 

Tangible common equity

$

650,103

 

 

$

634,423

 

 

$

611,507

 

 

$

630,765

 

 

$

607,218

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

8,367,976

 

 

$

8,357,501

 

 

$

7,500,643

 

 

$

7,333,791

 

 

$

7,346,791

 

Less: Goodwill

210,344

 

 

210,344

 

 

210,344

 

 

210,344

 

 

211,251

 

Less: Intangible assets

21,820

 

 

23,196

 

 

24,585

 

 

26,076

 

 

27,626

 

Tangible assets

$

8,135,812

 

 

$

8,123,961

 

 

$

7,265,714

 

 

$

7,097,371

 

 

$

7,107,914

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

7.99

%

 

7.81

%

 

8.42

%

 

8.89

%

 

8.54

%

 

Quarter Ended

($ in thousands)

Sep 30,
2020

 

Jun 30,
2020

 

Sep 30,
2019

AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY

Average shareholder’s equity

$

885,496

 

 

$

868,163

 

 

$

843,974

 

Less average goodwill

210,344

 

 

210,344

 

 

211,251

 

Less average intangible assets

22,489

 

 

23,873

 

 

28,392

 

Average tangible common equity

$

652,663

 

 

$

633,946

 

 

$

604,331

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

($ in thousands)

Sep 30,
2020

Jun 30,
2020

Mar 31,
2020

Dec 31,
2019

Sep 30,
2019

CALCULATION OF PRE-PROVISION NET REVENUE

Net interest income

$

63,354

 

 

$

65,833

 

 

$

63,368

 

 

$

61,613

 

 

$

63,046

 

Noninterest income

12,629

 

 

9,960

 

 

13,408

 

 

14,418

 

 

13,564

 

Less: Noninterest expense

39,524

 

 

37,912

 

 

38,673

 

 

38,354

 

 

38,239

 

Merger-related expenses

1,563

 

 

 

 

 

 

 

 

393

 

PPNR (excluding merger-related expenses)

$

38,022

 

 

$

37,881

 

 

$

38,103

 

 

$

37,677

 

 

$

38,764

 

 

Quarter Ended

 

Quarter Ended

($ in thousands, except per share data)

Sep 30,
2020

 

Jun 30,
2020

IMPACT OF PAYCHECK PROTECTION PROGRAM

Net income - GAAP

$

17,951

 

 

$

14,634

 

PPP interest and fee income

(5,226

)

 

(4,083

)

Related tax effect

1,291

 

 

1,009

 

Adjusted net income - Non-GAAP

$

14,016

 

 

$

11,560

 

 

 

 

 

Average diluted common shares

26,228

 

 

26,195

 

EPS - GAAP net income

$

0.68

 

 

$

0.56

 

EPS - Adjusted net income

$

0.53

 

 

$

0.44

 

 

 

 

 

Average assets - GAAP

$

8,341,968

 

 

$

8,158,204

 

Average PPP loans, net

(813,244

)

 

(634,632

)

Adjusted average assets - Non-GAAP

$

7,528,724

 

 

$

7,523,572

 

 

 

 

 

ROAA - GAAP net income

0.86

%

 

0.72

%

ROAA - Adjusted net income, adjusted average assets

0.74

%

 

0.62

%

 

 

 

 

PPNR (excluding merger-related expenses) - Non-GAAP (see reconciliation above)

$

38,022

 

 

$

37,881

 

PPP interest and fees

(5,226

)

 

(4,083

)

Adjusted PPNR (excluding merger-related expenses) - Non-GAAP

$

32,796

 

 

$

33,798

 

 

 

 

 

PPNR ROAA (excluding merger-related expenses) - PPNR (excluding merger-related expenses)

1.81

%

 

1.87

%

PPNR ROAA (excluding merger-related expenses) - adjusted PPNR (excluding merger-related expenses), adjusted average assets

1.73

%

 

1.81

%

 

 

 

 

Tangible assets - Non-GAAP (see reconciliation above)

$

8,135,812

 

 

$

8,123,961

 

PPP loans outstanding, net

(819,100

)

 

(807,814

)

Adjusted tangible assets - Non-GAAP

$

7,316,712

 

 

$

7,316,147

 

 

 

 

 

Tangible common equity Non - GAAP (see reconciliation above)

$

650,103

 

 

$

634,423

 

Tangible common equity to tangible assets

7.99

%

 

7.81

%

Tangible common equity to tangible assets - adjusted tangible assets

8.89

%

 

8.67

%

 

 

 

 

Average assets for leverage ratio

$

8,115,020

 

 

$

7,928,286

 

Average PPP loans, net

(813,244

)

 

(634,632

)

Adjusted average assets for leverage ratio - Non-GAAP

$

7,301,776

 

 

$

7,293,654

 

 

 

 

 

Tier 1 capital

$

745,397

 

 

$

726,574

 

Leverage ratio

9.2

%

 

9.2

%

Leverage ratio - adjusted average assets for leverage ratio

10.2

%

 

10.0

%

 

 

 

 

Net interest income - tax equivalent

$

64,192

 

 

$

66,537

 

PPP interest and fees

(5,226

)

 

(4,083

)

Adjusted net interest income - tax equivalent

$

58,966

 

 

$

62,454

 

 

 

 

 

Average earning assets -GAAP

$

7,770,084

 

 

$

7,571,196

 

Average PPP loans, net

(813,244

)

 

(634,632

)

Adjusted average earning assets - Non-GAAP

$

6,956,840

 

 

$

6,936,564

 

 

 

 

 

Net interest margin - tax equivalent

3.29

%

 

3.53

%

Net interest margin - tax equivalent - adjusted net interest income, adjusted average earning assets

3.37

%

 

3.62

%

 

 

 

 

Loans - GAAP

$

6,126,307

 

 

$

6,140,051

 

PPP loans outstanding, net

(819,100

)

 

(807,814

)

Adjusted loans - Non-GAAP

$

5,307,207

 

 

$

5,332,237

 

 

 

 

 

Allowance for credit losses on loans

$

123,270

 

 

$

110,270

 

Allowance for credit losses on loans/loans - GAAP

2.01

%

 

1.80

%

Allowance for credit losses on loans/loans - adjusted loans

2.32

%

 

2.07

%

 

Investor Relations:
Keene Turner, Executive Vice President and CFO
(314) 512-7233

Media:
Karen Loiterstein, Senior Vice President
(314) 512-7141

Source: Enterprise Financial Services Corp