8-K
ENTERPRISE FINANCIAL SERVICES CORP (EFSC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 24, 2023
ENTERPRISE FINANCIAL SERVICES CORP
(Exact name of registrant as specified in its charter)
| Delaware | 001-15373 | 43-1706259 | |||
|---|---|---|---|---|---|
| (State or Other Jurisdiction <br>of Incorporation) | (Commission <br>File Number) | (IRS Employer <br>Identification No.) | 150 N. Meramec Avenue, St. Louis, Missouri<br><br>(Address of principal executive offices) | 63105<br><br>(Zip Code) | |
| --- | --- |
Registrant's telephone number, including area code
(314) 725-5500
| Not applicable |
|---|
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | EFSC | Nasdaq Global Select Market |
| Depositary Shares, Each Representing a 1/40th Interest in a Share of 5.00% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | EFSCP | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 24, 2023, Enterprise Financial Services Corp (the "Company" or "EFSC") issued a press release announcing financial information for the quarter ended March 31, 2023. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
On April 25, 2023, at 10:00 a.m. Central time, the Company intends to hold a webcast to present information on its results of operations for the quarter ended March 31, 2023. The slide presentation which will accompany the webcast is furnished as Exhibit 99.2 and is incorporated herein by reference.
The press release, slide presentation and information contained therein and in this Item 2.02 shall not be deemed “filed” with the Securities and Exchange Commission.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release dated April 24, 2023.
99.2 Presentation to be conducted April 25, 2023.
104 The cover page of this Current Report on Form 8-K, formatted in Inline XBRL.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ENTERPRISE FINANCIAL SERVICES CORP | |||
|---|---|---|---|
| Date: | April 24, 2023 | By: | /s/ Troy R. Dumlao |
| Troy R. Dumlao | |||
| Senior Vice President and Chief Accounting Officer |
Document
EXHIBIT 99.1
ENTERPRISE FINANCIAL REPORTS FIRST QUARTER 2023 RESULTS
First Quarter Results
•Net income of $55.7 million, $1.46 per diluted common share
•Net interest margin of 4.71%, quarterly increase of five basis points
•Total loans of $10.0 billion, quarterly increase of $274.8 million
•Total deposits of $11.2 billion, quarterly increase of $325.5 million
• Tangible common equity to tangible assets1 of 8.81%
St. Louis, Mo. April 24, 2023 – 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 first quarter earnings, “We delivered strong results in the first quarter, with high quality loan growth, enhanced liquidity and an improved capital position. In a competitive and challenging environment, we have continued to serve our customers with products and relationship-based services that meet their needs, driving a $75 million increase in customer deposits in the first quarter. Our focus in these areas resulted in a return on assets of 1.7% and a return on tangible common equity1 of 20% for the first quarter. As we look to the remainder of 2023, we believe the strength of our balance sheet and our diversified business model have us well positioned.”
Highlights
•Earnings - Net income in the first quarter 2023 was $55.7 million, a decrease of $4.3 million compared to the linked quarter and an increase of $8.0 million from the prior year quarter. Earnings per share (“EPS”) was $1.46 per diluted common share for the first quarter 2023, compared to $1.58 and $1.23 per diluted common share for the linked and prior year quarters, respectively.
•Pre-provision net revenue2 (“PPNR”) - PPNR of $75.0 million in the first quarter 2023 decreased $3.6 million from the linked quarter and increased $18.0 million from the prior year quarter, respectively. The decrease from the linked quarter was primarily due to a seasonal increase in noninterest expense, partially offset by an increase in net interest income. The increase compared to the prior year quarter was primarily due to an increase in net interest income, partially offset by an increase in noninterest expense.
•Net interest income and net interest margin (“NIM”) - Net interest income of $139.5 million for the first quarter 2023 increased $0.7 million and $38.4 million from the linked and prior year quarters, respectively. NIM was 4.71% for the first quarter 2023, compared to 4.66% and 3.28% for the linked and prior year quarters, respectively. Net interest income and NIM benefited from higher average loan and investment balances combined with expanding yields on earning assets, partially offset by higher deposit costs and a decline in average interest-earning cash balances.
•Noninterest income - Noninterest income of $16.9 million for the first quarter 2023 was stable compared to the linked quarter and decreased $1.7 million from the prior year quarter. The decline from the prior year quarter was primarily due to a decrease in customer swap fee income, card services revenue and tax credit income. Lower transaction volumes led to the decrease in customer swap fee income and tax credit income, and the Durbin Amendment cap on debit card income limited card services revenue since July 1, 2022.
1 Tangible common equity to tangible assets and return on tangible common equity are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
2 Pre-provision net revenue is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
•Loans - Loans totaled $10.0 billion at March 31, 2023, an increase of $274.8 million, or 11.4% on an annualized basis, from the linked quarter and an increase of $955.8 million from the prior year period. Average loans totaled $9.8 billion for the quarter ended March 31, 2023, compared to $9.4 billion and $9.0 billion for the linked and prior year quarters, respectively.
•Asset quality - The allowance for credit losses to total loans was 1.38% at March 31, 2023, compared to 1.41% at December 31, 2022 and 1.54% at March 31, 2022. Nonperforming assets to total assets was 0.09% at March 31, 2023, compared to 0.08% and 0.17% at December 31, 2022 and March 31, 2022, respectively. The provision for credit losses of $4.2 million recorded in the first quarter 2023 was primarily related to the credit impairment of an investment security in subordinated debt of a failed bank, and to loan growth, partially offset by a decrease in the reserve for unfunded commitments.
•Deposits - Total deposits increased $325.5 million from the linked quarter to $11.2 billion as of March 31, 2023. Total estimated insured deposits, which includes collateralized deposits and accounts that qualify for pass through insurance, totaled $7.7 billion at March 31, 2023. Average deposits totaled $10.9 billion for the quarter ended March 31, 2023 compared to $11.0 billion and $11.5 billion for the linked and prior year quarters, respectively. At March 31, 2023, noninterest-bearing deposit accounts represented 37.6% of total deposits, and the loan to deposit ratio was 89.8%.
•Capital - Total shareholders’ equity was $1.6 billion and the tangible common equity to tangible assets ratio was 8.8% at March 31, 2023, compared to 8.4% at December 31, 2022. The tangible common equity to tangible assets ratio, adjusted for unrealized losses on held-to-maturity securities,3 was 8.4% at March 31, 2023 and 7.9% at December 31, 2022. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.0% and a total risk-based capital ratio of 13.1% as of March 31, 2023. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 11.2% and 14.3%, respectively, at March 31, 2023.
The Company’s Board of Directors approved a quarterly dividend of $0.25 per common share, payable on June 30, 2023 to shareholders of record as of June 15, 2023. 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) March 15, 2023 to (but excluding) June 15, 2023. The dividend will be payable on June 15, 2023 to holders of record of Series A Preferred Stock as of May 31, 2023.
•Liquidity - The Company’s total available on- and off-balance-sheet liquidity was approximately $4.4 billion at March 31, 2023. On-balance-sheet liquidity consisted of cash of $285.1 million and unpledged investment securities with a fair value of $449.2 million at March 31, 2023. In the first quarter 2023, the Company pledged additional securities to the Federal Reserve to increase its available borrowing capacity. The Company also has $937.4 million of SBA guaranteed loans, a portion of which could be sold in the secondary market to generate earnings and liquidity. Off-balance-sheet liquidity consisted of $824.1 million available through the Federal Home Loan Bank, $2.7 billion 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.
3 Tangible common equity to tangible assets ratio and the tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
2
Net Interest Income and NIM
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 average interest rates earned and paid, all on a tax-equivalent basis.
| December 31, 2022 | March 31, 2022 | ||||||||||||||||
| ( in thousands) | Interest <br>Income/<br>Expense | Average Yield/ Rate | Average<br>Balance | Interest<br>Income/<br>Expense | Average Yield/ Rate | Average<br>Balance | Interest<br>Income/<br>Expense | Average Yield/ Rate | |||||||||
| Assets | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Loans1, 2 | 9,795,045 | $ | 152,762 | 6.33 | % | $ | 9,423,984 | $ | 139,432 | 5.87 | % | $ | 9,005,875 | $ | 96,301 | 4.34 | % |
| Securities2 | 17,117 | 3.03 | 2,204,211 | 16,191 | 2.91 | 1,923,969 | 10,969 | 2.31 | |||||||||
| Interest-earning deposits | 1,195 | 4.56 | 367,100 | 3,097 | 3.35 | 1,781,272 | 817 | 0.19 | |||||||||
| Total interest-earning assets | 171,074 | 5.69 | 11,995,295 | 158,720 | 5.25 | 12,711,116 | 108,087 | 3.45 | |||||||||
| Noninterest-earning assets | 991,273 | 902,887 | |||||||||||||||
| Total assets | 13,131,195 | $ | 12,986,568 | $ | 13,614,003 | ||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing demand accounts | 2,201,910 | $ | 5,907 | 1.09 | % | $ | 2,242,268 | $ | 4,136 | 0.73 | % | $ | 2,505,319 | $ | 536 | 0.09 | % |
| Money market accounts | 15,471 | 2.22 | 2,696,417 | 9,509 | 1.40 | 2,872,302 | 1,460 | 0.21 | |||||||||
| Savings | 230 | 0.13 | 775,488 | 100 | 0.05 | 817,431 | 66 | 0.03 | |||||||||
| Certificates of deposit | 3,053 | 1.85 | 524,938 | 1,017 | 0.77 | 607,133 | 797 | 0.53 | |||||||||
| Total interest-bearing deposits | 24,661 | 1.56 | 6,239,111 | 14,762 | 0.94 | 6,802,185 | 2,859 | 0.17 | |||||||||
| Subordinated debentures | 2,409 | 6.28 | 155,359 | 2,376 | 6.07 | 154,959 | 2,220 | 5.81 | |||||||||
| FHLB advances | 1,332 | 4.87 | 8,864 | 104 | 4.65 | 50,000 | 195 | 1.58 | |||||||||
| Securities sold under agreements to repurchase | 749 | 1.41 | 182,362 | 282 | 0.61 | 262,252 | 60 | 0.09 | |||||||||
| Other borrowings | 353 | 2.66 | 26,993 | 378 | 5.56 | 22,841 | 82 | 1.46 | |||||||||
| Total interest-bearing liabilities | 29,504 | 1.72 | 6,612,689 | 17,902 | 1.07 | 7,292,237 | 5,416 | 0.30 | |||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||
| Demand deposits | 4,763,503 | 4,692,027 | |||||||||||||||
| Other liabilities | 119,784 | 93,518 | |||||||||||||||
| Total liabilities | 11,495,976 | 12,077,782 | |||||||||||||||
| Shareholders' equity | 1,490,592 | 1,536,221 | |||||||||||||||
| Total liabilities and shareholders' equity | 13,131,195 | $ | 12,986,568 | $ | 13,614,003 | ||||||||||||
| Total net interest income | $ | 141,570 | $ | 140,818 | $ | 102,671 | |||||||||||
| Net interest margin | 4.71 | % | 4.66 | % | 3.28 | % | |||||||||||
| 1 Average balances include nonaccrual loans. Interest income includes loan fees of 3.7 million, 3.7 million, and 5.2 million for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively. | |||||||||||||||||
| 2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were 2.0 million, 2.0 million, and 1.5 million for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively. |
All values are in US Dollars.
Net interest income for the first quarter was $139.5 million, an increase of $0.7 million compared to the linked quarter and an increase of $38.4 million from the prior year period. The increase from the linked and prior year quarters reflects the benefit of higher market interest rates on the Company’s asset sensitive balance sheet combined with organic growth. The effective federal funds rate for the first quarter 2023 was 4.52%, an increase of 87 basis points compared to the linked quarter, and a 440 basis point increase over the prior year quarter.
Interest income increased $12.3 million during the first quarter 2023 primarily due to higher interest earned on a larger loan base resulting in a $13.3 million sequential expansion. This increase was partially offset by a $1.9 million decrease in interest on cash balances. Interest on loans benefited from a 46 basis point increase in yield and a $371.1 million increase in average loans compared to the linked quarter. The average interest rate of new loan originations in the first quarter 2023 was 6.53%. The yield on interest-earning cash deposits increased 121 basis points in the quarter but was offset by a $260.8 million decrease in the average balance which reduced interest income in the first quarter 2023.
Interest expense increased $11.6 million in the first quarter 2023 primarily due to a $9.9 million increase in deposit interest expense and a $1.2 million increase in interest expense on FHLB borrowings. The increase in interest expense reflects a shift in the deposit mix from demand deposits and interest-bearing demand deposits to money market accounts and certificates of deposit, as well as higher rates paid on deposits. This deposit shift principally occurred during March following the turmoil in the banking markets. The interest-bearing liability rate was 1.72%, an increase of 65 basis points compared to the linked quarter. The average cost of interest-bearing deposits was 1.56%, an increase of 62 basis points over the linked quarter. The increase was primarily due to higher rates paid on commercial money market accounts, which increased 82 basis points to 2.22% in the current quarter. The total cost of deposits, including noninterest-bearing demand accounts, was 0.92% during the first quarter 2023, compared to 0.53% in the linked quarter.
NIM, on a tax equivalent basis, was 4.71% in the first quarter 2023, an increase of five basis points from the linked quarter and an increase of 143 basis points from the prior year quarter. For the month of March 2023, the loan portfolio yield was 6.40% and the cost of total deposits was 1.04%.
Investments
| Quarter ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
| ($ in thousands) | Carrying Value | Net Unrealized Loss | Carrying Value | Net Unrealized Loss | Carrying Value | Net Unrealized Loss | ||||||
| Available-for-sale (AFS) | $ | 1,555,109 | $ | (161,572) | $ | 1,535,807 | $ | (193,247) | $ | 1,392,444 | $ | (99,304) |
| Held-to-maturity (HTM) | 720,694 | (65,013) | 709,915 | (82,133) | 541,039 | (48,255) | ||||||
| Total | $ | 2,275,803 | $ | (226,585) | $ | 2,245,722 | $ | (275,380) | $ | 1,933,483 | $ | (147,559) |
Investment securities totaled $2.3 billion at March 31, 2023, an increase of $30.1 million from the linked quarter. The increase was primarily due to a $31.7 million decrease in the unrealized loss on available-for-sale securities primarily due to a decline in longer-term rates in the quarter. Investment purchases in the quarter had a weighted average, tax equivalent yield of 4.79%. In January 2023, $28.4 million of available-for-sale investment securities with a tax equivalent yield of 4.0% were sold at a net gain of $0.4 million and were reinvested in securities with a 4.5% yield.
The average duration of the investment portfolio was 5.5 years at March 31, 2023. Due to the shorter average duration of the loan portfolio, approximately 3 years, the Company leverages the investment portfolio to lengthen the overall duration of the balance sheet, primarily using high-quality municipal securities. The expected cash flow from pay downs, maturities and interest over the next 12 months is approximately $260 million. Investment securities represented 17% of total assets at the end of the current and linked quarters, which is comparable to the Company’s historical percentage dating back to 2019. The ratio of investments to assets was 14% in the prior year quarter and was lower primarily due to the high level of on-balance-sheet liquidity due to the low rate environment at that time. The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities2 was 8.4% at March 31, 2023, compared to 7.9% at December 31, 2022.
Loans
The following table presents total loans for the most recent five quarters:
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||
| C&I | $ | 2,005,539 | $ | 1,904,654 | $ | 1,780,677 | $ | 1,641,740 | $ | 1,438,607 | |||||
| CRE investor owned | 2,239,932 | 2,176,424 | 2,106,458 | 1,977,806 | 1,982,645 | ||||||||||
| CRE owner occupied | 1,173,985 | 1,174,094 | 1,133,467 | 1,118,895 | 1,138,106 | ||||||||||
| SBA loans* | 1,315,732 | 1,312,378 | 1,269,065 | 1,284,279 | 1,249,929 | ||||||||||
| Sponsor finance* | 677,529 | 635,061 | 650,102 | 647,180 | 641,476 | ||||||||||
| Life insurance premium financing* | 859,910 | 817,115 | 779,606 | 748,376 | 695,640 | ||||||||||
| Tax credits* | 547,513 | 559,605 | 507,681 | 550,662 | 518,020 | ||||||||||
| SBA PPP loans | 5,438 | 7,272 | 13,165 | 49,175 | 134,084 | ||||||||||
| Residential real estate | 348,726 | 379,924 | 381,634 | 391,867 | 410,173 | ||||||||||
| Construction and land development | 590,509 | 534,753 | 513,452 | 626,577 | 610,830 | ||||||||||
| Other | 247,105 | 235,858 | 219,680 | 232,619 | 236,563 | ||||||||||
| Total loans | $ | 10,011,918 | $ | 9,737,138 | $ | 9,354,987 | $ | 9,269,176 | $ | 9,056,073 | |||||
| Total loan yield | 6.33 | % | 5.87 | % | 5.10 | % | 4.51 | % | 4.34 | % | |||||
| Variable interest rate loans to total loans | 63 | % | 63 | % | 63 | % | 64 | % | 63 | % | |||||
| *Specialty loan category |
Loans totaled $10.0 billion at March 31, 2023, increasing $274.8 million compared to the linked quarter. The increase was driven primarily by increases in C&I, CRE investor owned, construction and specialty loans. The increase in specialty loans was primarily in sponsor finance and life insurance. Each of the Company’s geographic regions increased loans during the quarter. Average line utilization was approximately 42% for the quarter ended March 31, 2023, compared to 41% and 40% for the linked and prior year quarters, respectively. The weighted average life of the loan portfolio is approximately 3 years.
Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31,<br>2023 | December 31,<br>2022 | September 30,<br>2022 | June 30,<br>2022 | March 31,<br>2022 | ||||||||||
| Nonperforming loans* | $ | 11,972 | $ | 9,981 | $ | 18,184 | $ | 19,560 | $ | 21,160 | |||||
| Other | 250 | 269 | 269 | 955 | 1,459 | ||||||||||
| Nonperforming assets* | $ | 12,222 | $ | 10,250 | $ | 18,453 | $ | 20,515 | $ | 22,619 | |||||
| Nonperforming loans to total loans | 0.12 | % | 0.10 | % | 0.19 | % | 0.21 | % | 0.23 | % | |||||
| Nonperforming assets to total assets | 0.09 | % | 0.08 | % | 0.14 | % | 0.16 | % | 0.17 | % | |||||
| Allowance for credit losses to total loans | 1.38 | % | 1.41 | % | 1.50 | % | 1.52 | % | 1.54 | % | |||||
| Net charge-offs (recoveries) | $ | (264) | $ | 2,075 | $ | 478 | $ | (175) | $ | 1,521 | |||||
| *Guaranteed balances excluded | $ | 6,835 | $ | 6,708 | $ | 6,532 | $ | 6,063 | $ | 3,954 |
Nonperforming assets increased $2.0 million during the first quarter 2023 and decreased $10.4 million from the prior year quarter. A net recovery to average loans of one basis point was recognized in the first quarter 2023, compared to nine basis points of net charge-offs in the linked quarter and seven basis points of net charge-offs in the prior year quarter.
The provision for credit losses totaled $4.2 million in the current quarter, compared to $2.1 million in the linked quarter and a benefit of $4.1 million in the prior year quarter. The provision in the current quarter was primarily related to the impairment of an available-for-sale investment security of a failed bank and loan growth. The allowance for credit losses to total loans was 1.38% at March 31, 2023, compared to 1.41% and 1.54% in the linked and prior year quarters, respectively, and is reflective of the trend in credit quality.
Deposits
The following table presents deposits broken out by type for the most recent five quarters:
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||
| Noninterest-bearing demand accounts | $ | 4,192,523 | $ | 4,642,732 | $ | 4,642,539 | $ | 4,746,478 | $ | 4,881,043 | |||||
| Interest-bearing demand accounts | 2,395,901 | 2,256,295 | 2,270,898 | 2,197,957 | 2,547,482 | ||||||||||
| Money market and savings accounts | 3,672,539 | 3,399,415 | 3,617,249 | 3,562,982 | 3,678,135 | ||||||||||
| Brokered certificates of deposit | 369,505 | 118,968 | 129,039 | 129,064 | 129,017 | ||||||||||
| Other certificates of deposit | 524,168 | 411,740 | 397,869 | 456,137 | 468,458 | ||||||||||
| Total deposit portfolio | $ | 11,154,636 | $ | 10,829,150 | $ | 11,057,594 | $ | 11,092,618 | $ | 11,704,135 | |||||
| Noninterest-bearing deposits to total deposits | 37.6 | % | 42.9 | % | 42.0 | % | 42.8 | % | 41.7 | % | |||||
| Total costs of deposits | 0.92 | % | 0.53 | % | 0.31 | % | 0.13 | % | 0.10 | % |
Total deposits at March 31, 2023 were $11.2 billion, an increase of $325.5 million from December 31, 2022, and a decrease of $549.5 million from March 31, 2022. The increase from the linked quarter includes $250.5 million in brokered certificates of deposit used for term liquidity purposes in place of FHLB borrowings. The mix of the deposit portfolio shifted from noninterest bearing demand deposits to higher yielding categories in the current quarter primarily due to the competitive interest rate environment. Excluding brokered certificates of deposit, total deposits increased $75.0 million in the current quarter. Reciprocal deposits, which are placed through third party programs to provide FDIC insurance on larger deposit relationships, totaled $486.7 million at March 31, 2023, compared to $205.8 million at December 31, 2022.
Total estimated insured deposits, which includes collateralized deposits, reciprocal accounts and accounts that qualify for pass-through insurance, totaled $7.7 billion at the end of March 31, 2023 compared to $4.9 billion in the linked quarter. The increase in insured deposits was the result of an increase in reciprocal deposits and accounts that qualify for pass-through insurance.
Noninterest Income and Expense
The following tables present a comparative summary of the major components of noninterest income, other income, and noninterest expense for the periods indicated:
| Linked quarter comparison | Prior year comparison | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||
| ($ in thousands) | March 31, 2023 | December 31, 2022 | Increase (decrease) | March 31, 2022 | Increase (decrease) | |||||||||
| Deposit service charges | 4,128 | 4,463 | $ | (335) | (8) | % | 4,163 | $ | (35) | (1) | % | |||
| Wealth management revenue | 2,516 | 2,423 | 93 | 4 | % | 2,622 | (106) | (4) | % | |||||
| Card services revenue | 2,338 | 2,345 | (7) | — | % | 3,040 | (702) | (23) | % | |||||
| Tax credit income | 1,813 | 2,389 | (576) | (24) | % | 2,608 | (795) | (30) | % | |||||
| Other income | 6,103 | 5,253 | 850 | 16 | % | 6,208 | (105) | (2) | % | |||||
| Total noninterest income | $ | 16,898 | $ | 16,873 | $ | 25 | — | % | $ | 18,641 | $ | (1,743) | (9) | % |
Total noninterest income was $16.9 million for the current quarter, stable with the linked quarter and a decrease of $1.7 million from the prior year quarter. The $1.7 million decrease from the prior year quarter was primarily due to decreases in tax credit income and card services revenue. Lower transaction volumes led to the decrease in tax credit income while the Durbin Amendment cap on debit card income limited card services revenue since July 1, 2022.
| Linked quarter comparison | Prior year comparison | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||
| ($ in thousands) | March 31, 2023 | December 31, 2022 | Increase (decrease) | March 31, 2022 | Increase (decrease) | |||||||||
| BOLI | $ | 791 | $ | 773 | $ | 18 | 2 | % | $ | 1,034 | $ | (243) | (24) | % |
| Community development investments | 595 | 2,775 | (2,180) | (79) | % | 2,166 | (1,571) | (73) | % | |||||
| Private equity fund distribution | 1,749 | 433 | 1,316 | 304 | % | 188 | 1,561 | 830 | % | |||||
| Servicing fees | 512 | 181 | 331 | 183 | % | 658 | (146) | (22) | % | |||||
| Swap fees | 250 | 189 | 61 | 32 | % | 1,156 | (906) | (78) | % | |||||
| Miscellaneous income | 2,206 | 902 | 1,304 | 145 | % | 1,006 | 1,200 | 119 | % | |||||
| Total other income | $ | 6,103 | $ | 5,253 | $ | 850 | 16 | % | $ | 6,208 | $ | (105) | (2) | % |
Community development and private equity distributions included in other income are not consistent sources of income and fluctuate based on distributions from the underlying funds. Servicing fee income may also fluctuate based on prepayment experience and changes to the discount rate used in the valuation of the servicing rights. Swap fee income is generated from customer hedging activities and was higher in the prior year quarter when market rates started to increase. The increase in miscellaneous income from the linked and prior year quarters was primarily due to a gain on the sale of SBA loans and a gain on the sale of investment securities. In the first quarter 2023, SBA loans totaling $8.8 million were sold and $28.4 million of lower-yielding investment securities were sold in January at a gain and the proceeds were reinvested at a higher yield.
| Linked quarter comparison | Prior year comparison | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||
| ($ in thousands) | March 31, 2023 | December 31,<br>2022 | Increase (decrease) | March 31, 2022 | Increase (decrease) | |||||||||
| Employee compensation and benefits | $ | 42,503 | $ | 38,175 | $ | 4,328 | 11 | % | $ | 35,827 | $ | 6,676 | 19 | % |
| Occupancy | 4,061 | 4,248 | (187) | (4) | % | 4,586 | (525) | (11) | % | |||||
| Deposit costs | 12,720 | 13,256 | (536) | (4) | % | 4,260 | 8,460 | 199 | % | |||||
| Other expense | 21,699 | 21,470 | 229 | 1 | % | 18,127 | 3,572 | 20 | % | |||||
| Total noninterest expense | $ | 80,983 | $ | 77,149 | $ | 3,834 | 5 | % | $ | 62,800 | $ | 18,183 | 29 | % |
Noninterest expense was $81.0 million for the first quarter 2023, compared to $77.1 million for the linked quarter, and $62.8 million for the prior year quarter. Employee compensation and benefits increased $4.3 million from the linked quarter primarily due to a $3.4 million increase in employer payroll taxes and 401(k) matches that are seasonally higher in the first quarter each year, and a $3.3 million increase in salaries due to annual merit increases that became effective on March 1, 2023 and an increase in the associate base. These increases were partially offset by a $3.8 million decline in variable compensation that is typically higher in the fourth quarter each year. Deposit costs declined slightly from the linked quarter primarily due to higher year-end settlements that occurred in the linked quarter. Deposit costs relate to certain specialized deposit businesses that are impacted by higher interest rates as well as increasing average balances.
The increase in noninterest expense of $18.2 million from the prior year quarter was primarily an increase in the associate base, merit increases throughout 2022 and 2023, and an increase in variable deposit costs.
For the first quarter 2023, the Company’s efficiency ratio was 51.8%, compared to 49.6% and 52.4% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio4 was 50.5% for the quarter ended March 31, 2023, compared to 48.1% for the linked quarter and 50.6% for the prior year quarter.
Income Taxes
The Company’s effective tax rate was 22% for each of the current, linked and prior year quarters.
Capital
The following table presents total equity and various EFSC capital ratios for the most recent five quarters:
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2023* | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||
| Shareholders’ equity | $ | 1,592,820 | $ | 1,522,263 | $ | 1,446,218 | $ | 1,447,412 | $ | 1,473,177 | |||||
| Total risk-based capital to risk-weighted assets | 14.3 | % | 14.2 | % | 14.2 | % | 14.2 | % | 14.4 | % | |||||
| Tier 1 capital to risk weighted assets | 12.6 | % | 12.6 | % | 12.6 | % | 12.5 | % | 12.7 | % | |||||
| Common equity tier 1 capital to risk-weighted assets | 11.2 | % | 11.1 | % | 11.0 | % | 10.9 | % | 11.0 | % | |||||
| Tangible common equity to tangible assets | 8.8 | % | 8.4 | % | 7.9 | % | 7.8 | % | 7.6 | % | |||||
| Leverage ratio | 11.1 | % | 10.9 | % | 10.4 | % | 9.8 | % | 9.6 | % |
*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 $1.6 billion at March 31, 2023, an increase of $70.6 million from the linked quarter. The increase was primarily due to current period net income of $55.7 million and a $24.4 million increase in accumulated other comprehensive income, primarily due to a net fair value increase in the Company’s fixed-rate, available-for-sale investment portfolio. These increases were partially offset by common and preferred stock dividends of $10.3 million. The Company’s tangible common book value per share was $30.55 at March 31, 2023, compared to $28.67 and $27.06 in the linked and prior year quarters, 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 other financial measures, such as tangible common equity, PPNR, ROATCE, PPNR return on average assets (“PPNR ROAA”), core efficiency ratio, the tangible common equity ratio, and tangible book value per common 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, PPNR ROAA, core efficiency ratio, the tangible common equity ratio, and tangible book value per common 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 merger-related expenses, facilities charges, and the gain or loss on sale of investment securities, that the Company believes to be
4 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
8
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, April 25, 2023. During the call, management will review the first quarter 2023 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 1-888-550-5279 (Conference ID #7004515). A recorded replay of the conference call will be available on the website approximately two hours after the call’s completion. Visit https://bit.ly/EFSC1Q2023earnings to register. The replay will be available for approximately two weeks following the conference call.
About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.3 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” 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 Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, including the COVID-19 pandemic, and their effects on economic and business environments in which we operate, including the ongoing disruption to the financial market and other economic activity caused by the continuing COVID-19 pandemic, 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, 2022, 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.
For more information contact
Investor Relations: Keene Turner, Executive Vice President and CFO (314) 512-7233
Media: Steve Richardson, Senior Vice President (314) 995-5695
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | ||||||||||
| EARNINGS SUMMARY | |||||||||||||||
| Net interest income | $ | 139,529 | $ | 138,835 | $ | 124,290 | $ | 109,613 | $ | 101,165 | |||||
| Provision (benefit) for credit losses | 4,183 | 2,123 | 676 | 658 | (4,068) | ||||||||||
| Noninterest income | 16,898 | 16,873 | 9,454 | 14,194 | 18,641 | ||||||||||
| Noninterest expense | 80,983 | 77,149 | 68,843 | 65,424 | 62,800 | ||||||||||
| Income before income tax expense | 71,261 | 76,436 | 64,225 | 57,725 | 61,074 | ||||||||||
| Income tax expense | 15,523 | 16,435 | 14,025 | 12,576 | 13,381 | ||||||||||
| Net income | 55,738 | 60,001 | 50,200 | 45,149 | 47,693 | ||||||||||
| Preferred stock dividends | 938 | 937 | 937 | 938 | 1,229 | ||||||||||
| Net income available to common shareholders | $ | 54,800 | $ | 59,064 | $ | 49,263 | $ | 44,211 | $ | 46,464 | |||||
| Diluted earnings per common share | $ | 1.46 | $ | 1.58 | $ | 1.32 | $ | 1.19 | $ | 1.23 | |||||
| Return on average assets | 1.72 | % | 1.83 | % | 1.51 | % | 1.34 | % | 1.42 | % | |||||
| Return on average common equity | 14.85 | % | 16.52 | % | 13.74 | % | 12.65 | % | 12.87 | % | |||||
| ROATCE1 | 19.93 | % | 22.62 | % | 18.82 | % | 17.44 | % | 17.49 | % | |||||
| Net interest margin (tax equivalent) | 4.71 | % | 4.66 | % | 4.10 | % | 3.55 | % | 3.28 | % | |||||
| Efficiency ratio | 51.77 | % | 49.55 | % | 51.47 | % | 52.84 | % | 52.42 | % | |||||
| Core efficiency ratio1 | 50.47 | % | 48.10 | % | 49.80 | % | 51.03 | % | 50.60 | % | |||||
| Loans | $ | 10,011,918 | $ | 9,737,138 | $ | 9,354,987 | $ | 9,269,176 | $ | 9,056,073 | |||||
| Average loans | $ | 9,795,045 | $ | 9,423,984 | $ | 9,230,738 | $ | 9,109,131 | $ | 9,005,875 | |||||
| Assets | $ | 13,325,982 | $ | 13,054,172 | $ | 12,994,787 | $ | 13,084,506 | $ | 13,706,769 | |||||
| Average assets | $ | 13,131,195 | $ | 12,986,568 | $ | 13,158,121 | $ | 13,528,474 | $ | 13,614,003 | |||||
| Deposits | $ | 11,154,636 | $ | 10,829,150 | $ | 11,057,594 | $ | 11,092,618 | $ | 11,704,135 | |||||
| Average deposits | $ | 10,913,489 | $ | 11,002,614 | $ | 11,154,895 | $ | 11,530,432 | $ | 11,494,212 | |||||
| Period end common shares outstanding | 37,311 | 37,253 | 37,223 | 37,206 | 37,516 | ||||||||||
| Dividends per common share | $ | 0.25 | $ | 0.24 | $ | 0.23 | $ | 0.22 | $ | 0.21 | |||||
| Tangible book value per common share | $ | 30.55 | $ | 28.67 | $ | 26.62 | $ | 26.63 | $ | 27.06 | |||||
| Tangible common equity to tangible assets1 | 8.81 | % | 8.43 | % | 7.86 | % | 7.80 | % | 7.62 | % | |||||
| Total risk-based capital to risk-weighted assets | 14.3 | % | 14.2 | % | 14.2 | % | 14.2 | % | 14.4 | % | |||||
| 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) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||
| INCOME STATEMENTS | ||||||||||
| NET INTEREST INCOME | ||||||||||
| Interest income | $ | 169,033 | $ | 156,737 | $ | 135,695 | $ | 116,069 | $ | 106,581 |
| Interest expense | 29,504 | 17,902 | 11,405 | 6,456 | 5,416 | |||||
| Net interest income | 139,529 | 138,835 | 124,290 | 109,613 | 101,165 | |||||
| Provision (benefit) for credit losses | 4,183 | 2,123 | 676 | 658 | (4,068) | |||||
| Net interest income after provision (benefit) for credit losses | 135,346 | 136,712 | 123,614 | 108,955 | 105,233 | |||||
| NONINTEREST INCOME | ||||||||||
| Deposit service charges | 4,128 | 4,463 | 4,951 | 4,749 | 4,163 | |||||
| Wealth management revenue | 2,516 | 2,423 | 2,432 | 2,533 | 2,622 | |||||
| Card services revenue | 2,338 | 2,345 | 2,652 | 3,514 | 3,040 | |||||
| Tax credit income (loss) | 1,813 | 2,389 | (3,625) | 1,186 | 2,608 | |||||
| Other income | 6,103 | 5,253 | 3,044 | 2,212 | 6,208 | |||||
| Total noninterest income | 16,898 | 16,873 | 9,454 | 14,194 | 18,641 | |||||
| NONINTEREST EXPENSE | ||||||||||
| Employee compensation and benefits | 42,503 | 38,175 | 36,999 | 36,028 | 35,827 | |||||
| Occupancy | 4,061 | 4,248 | 4,497 | 4,309 | 4,586 | |||||
| Deposit costs | 12,720 | 13,256 | 7,661 | 5,905 | 4,260 | |||||
| Other expense | 21,699 | 21,470 | 19,686 | 19,182 | 18,127 | |||||
| Total noninterest expense | 80,983 | 77,149 | 68,843 | 65,424 | 62,800 | |||||
| Income before income tax expense | 71,261 | 76,436 | 64,225 | 57,725 | 61,074 | |||||
| Income tax expense | 15,523 | 16,435 | 14,025 | 12,576 | 13,381 | |||||
| Net income | $ | 55,738 | $ | 60,001 | $ | 50,200 | $ | 45,149 | $ | 47,693 |
| Preferred stock dividends | 938 | 937 | 937 | 938 | 1,229 | |||||
| Net income available to common shareholders | $ | 54,800 | $ | 59,064 | $ | 49,263 | $ | 44,211 | $ | 46,464 |
| Basic earnings per common share | $ | 1.47 | $ | 1.59 | $ | 1.32 | $ | 1.19 | $ | 1.23 |
| Diluted earnings per common share | $ | 1.46 | $ | 1.58 | $ | 1.32 | $ | 1.19 | $ | 1.23 |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| Quarter ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||
| BALANCE SHEETS | ||||||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ | 210,813 | $ | 229,580 | $ | 264,078 | $ | 271,763 | $ | 252,706 |
| Interest-earning deposits | 81,241 | 69,808 | 489,825 | 680,343 | 1,735,708 | |||||
| Debt and equity investments | 2,338,746 | 2,309,512 | 2,171,942 | 2,172,318 | 1,993,927 | |||||
| Loans held for sale | 261 | 1,228 | 785 | 4,615 | 4,270 | |||||
| Loans | 10,011,918 | 9,737,138 | 9,354,987 | 9,269,176 | 9,056,073 | |||||
| Allowance for credit losses | (138,295) | (136,932) | (140,572) | (140,546) | (139,212) | |||||
| Total loans, net | 9,873,623 | 9,600,206 | 9,214,415 | 9,128,630 | 8,916,861 | |||||
| Fixed assets, net | 42,340 | 42,985 | 43,882 | 46,028 | 46,900 | |||||
| Goodwill | 365,164 | 365,164 | 365,164 | 365,164 | 365,164 | |||||
| Intangible assets, net | 15,680 | 16,919 | 18,217 | 19,528 | 20,855 | |||||
| Other assets | 398,114 | 418,770 | 426,479 | 396,117 | 370,378 | |||||
| Total assets | $ | 13,325,982 | $ | 13,054,172 | $ | 12,994,787 | $ | 13,084,506 | $ | 13,706,769 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Noninterest-bearing deposits | $ | 4,192,523 | $ | 4,642,732 | $ | 4,642,539 | $ | 4,746,478 | $ | 4,881,043 |
| Interest-bearing deposits | 6,962,113 | 6,186,418 | 6,415,055 | 6,346,140 | 6,823,092 | |||||
| Total deposits | 11,154,636 | 10,829,150 | 11,057,594 | 11,092,618 | 11,704,135 | |||||
| Subordinated debentures and notes | 155,569 | 155,433 | 155,298 | 155,164 | 155,031 | |||||
| FHLB advances | 100,000 | 100,000 | — | 50,000 | 50,000 | |||||
| Other borrowings | 213,489 | 324,119 | 197,422 | 226,695 | 228,846 | |||||
| Other liabilities | 109,468 | 123,207 | 138,255 | 112,617 | 95,580 | |||||
| Total liabilities | 11,733,162 | 11,531,909 | 11,548,569 | 11,637,094 | 12,233,592 | |||||
| Shareholders’ equity: | ||||||||||
| Preferred stock | 71,988 | 71,988 | 71,988 | 71,988 | 71,988 | |||||
| Common stock | 373 | 373 | 372 | 372 | 395 | |||||
| Treasury stock | — | — | — | — | (73,528) | |||||
| Additional paid-in capital | 984,281 | 982,660 | 979,543 | 976,684 | 1,010,446 | |||||
| Retained earnings | 642,153 | 597,574 | 547,506 | 506,849 | 523,136 | |||||
| Accumulated other comprehensive loss | (105,975) | (130,332) | (153,191) | (108,481) | (59,260) | |||||
| Total shareholders’ equity | 1,592,820 | 1,522,263 | 1,446,218 | 1,447,412 | 1,473,177 | |||||
| Total liabilities and shareholders’ equity | $ | 13,325,982 | $ | 13,054,172 | $ | 12,994,787 | $ | 13,084,506 | $ | 13,706,769 |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | ||||||||||
| LOAN PORTFOLIO | |||||||||||||||
| Commercial and industrial | $ | 4,032,189 | $ | 3,859,882 | $ | 3,709,893 | $ | 3,596,701 | $ | 3,398,723 | |||||
| Commercial real estate | 4,699,302 | 4,628,371 | 4,438,647 | 4,294,375 | 4,278,138 | ||||||||||
| Construction real estate | 663,264 | 611,565 | 583,649 | 724,163 | 702,630 | ||||||||||
| Residential real estate | 364,059 | 395,537 | 397,450 | 413,727 | 432,639 | ||||||||||
| Other | 253,104 | 241,783 | 225,348 | 240,210 | 243,943 | ||||||||||
| Total loans | $ | 10,011,918 | $ | 9,737,138 | $ | 9,354,987 | $ | 9,269,176 | $ | 9,056,073 | |||||
| DEPOSIT PORTFOLIO | |||||||||||||||
| Noninterest-bearing demand accounts | $ | 4,192,523 | $ | 4,642,732 | $ | 4,642,539 | $ | 4,746,478 | $ | 4,881,043 | |||||
| Interest-bearing demand accounts | 2,395,901 | 2,256,295 | 2,270,898 | 2,197,957 | 2,547,482 | ||||||||||
| Money market and savings accounts | 3,672,539 | 3,399,415 | 3,617,249 | 3,562,982 | 3,678,135 | ||||||||||
| Brokered certificates of deposit | 369,505 | 118,968 | 129,039 | 129,064 | 129,017 | ||||||||||
| Other certificates of deposit | 524,168 | 411,740 | 397,869 | 456,137 | 468,458 | ||||||||||
| Total deposits | $ | 11,154,636 | $ | 10,829,150 | $ | 11,057,594 | $ | 11,092,618 | $ | 11,704,135 | |||||
| AVERAGE BALANCES | |||||||||||||||
| Loans | $ | 9,795,045 | $ | 9,423,984 | $ | 9,230,738 | $ | 9,109,131 | $ | 9,005,875 | |||||
| Securities | 2,288,451 | 2,204,211 | 2,202,255 | 2,068,119 | 1,923,969 | ||||||||||
| Interest-earning assets | 12,189,750 | 11,995,295 | 12,198,251 | 12,579,211 | 12,711,116 | ||||||||||
| Assets | 13,131,195 | 12,986,568 | 13,158,121 | 13,528,474 | 13,614,003 | ||||||||||
| Deposits | 10,913,489 | 11,002,614 | 11,154,895 | 11,530,432 | 11,494,212 | ||||||||||
| Shareholders’ equity | 1,568,451 | 1,490,592 | 1,494,504 | 1,474,267 | 1,536,221 | ||||||||||
| Tangible common equity1 | 1,115,052 | 1,035,896 | 1,038,495 | 1,016,940 | 1,077,529 | ||||||||||
| YIELDS (tax equivalent) | |||||||||||||||
| Loans | 6.33 | % | 5.87 | % | 5.10 | % | 4.51 | % | 4.34 | % | |||||
| Securities | 3.03 | 2.91 | 2.65 | 2.51 | 2.31 | ||||||||||
| Interest-earning assets | 5.69 | 5.25 | 4.47 | 3.76 | 3.45 | ||||||||||
| Interest-bearing deposits | 1.56 | 0.94 | 0.54 | 0.24 | 0.17 | ||||||||||
| Deposits | 0.92 | 0.53 | 0.31 | 0.13 | 0.10 | ||||||||||
| Subordinated debentures and notes | 6.28 | 6.07 | 5.91 | 5.84 | 5.81 | ||||||||||
| FHLB advances and other borrowed funds | 2.60 | 1.39 | 0.66 | 0.51 | 0.41 | ||||||||||
| Interest-bearing liabilities | 1.72 | 1.07 | 0.67 | 0.37 | 0.30 | ||||||||||
| Net interest margin | 4.71 | 4.66 | 4.10 | 3.55 | 3.28 |
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) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | ||||||||||
| ASSET QUALITY | |||||||||||||||
| Net charge-offs (recoveries) | $ | (264) | $ | 2,075 | $ | 478 | $ | (175) | $ | 1,521 | |||||
| Nonperforming loans | 11,972 | 9,981 | 18,184 | 19,560 | 21,160 | ||||||||||
| Classified assets | 110,384 | 99,122 | 98,078 | 96,801 | 93,199 | ||||||||||
| Nonperforming loans to total loans | 0.12 | % | 0.10 | % | 0.19 | % | 0.21 | % | 0.23 | % | |||||
| Nonperforming assets to total assets | 0.09 | % | 0.08 | % | 0.14 | % | 0.16 | % | 0.17 | % | |||||
| Allowance for credit losses to total loans | 1.38 | % | 1.41 | % | 1.50 | % | 1.52 | % | 1.54 | % | |||||
| Allowance for credit losses to nonperforming loans | 1,155.2 | % | 1,371.9 | % | 773.1 | % | 718.5 | % | 657.9 | % | |||||
| Net charge-offs (recoveries) to average loans -annualized | (0.01) | % | 0.09 | % | 0.02 | % | (0.01) | % | 0.07 | % | |||||
| WEALTH MANAGEMENT | |||||||||||||||
| Trust assets under management | $ | 1,956,146 | $ | 1,885,394 | $ | 1,691,230 | $ | 1,757,228 | $ | 1,943,428 | |||||
| MARKET DATA | |||||||||||||||
| Book value per common share | $ | 40.76 | $ | 38.93 | $ | 36.92 | $ | 36.97 | $ | 37.35 | |||||
| Tangible book value per common share1 | $ | 30.55 | $ | 28.67 | $ | 26.62 | $ | 26.63 | $ | 27.06 | |||||
| Market value per share | $ | 44.59 | $ | 48.96 | $ | 44.04 | $ | 41.50 | $ | 47.31 | |||||
| Period end common shares outstanding | 37,311 | 37,253 | 37,223 | 37,206 | 37,516 | ||||||||||
| Average basic common shares | 37,305 | 37,257 | 37,241 | 37,243 | 37,788 | ||||||||||
| Average diluted common shares | 37,487 | 37,415 | 37,348 | 37,282 | 37,858 | ||||||||||
| CAPITAL | |||||||||||||||
| Total risk-based capital to risk-weighted assets | 14.3 | % | 14.2 | % | 14.2 | % | 14.2 | % | 14.4 | % | |||||
| Tier 1 capital to risk-weighted assets | 12.6 | % | 12.6 | % | 12.6 | % | 12.5 | % | 12.7 | % | |||||
| Common equity tier 1 capital to risk-weighted assets | 11.2 | % | 11.1 | % | 11.0 | % | 10.9 | % | 11.0 | % | |||||
| Tangible common equity to tangible assets1 | 8.8 | % | 8.4 | % | 7.9 | % | 7.8 | % | 7.6 | % | |||||
| 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 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||||||||||||||||||||||||
| CORE EFFICIENCY RATIO | ||||||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 139,529 | $ | 138,835 | $ | 124,290 | $ | 109,613 | $ | 101,165 | ||||||||||||||||||||||
| Tax-equivalent adjustment | 2,041 | 1,983 | 1,854 | 1,699 | 1,506 | |||||||||||||||||||||||||||
| Noninterest income (GAAP) | 16,898 | 16,873 | 9,454 | 14,194 | 18,641 | |||||||||||||||||||||||||||
| Less gain on sale of investment securities | 381 | — | — | — | — | |||||||||||||||||||||||||||
| Less gain (loss) on sale of other real estate owned | 90 | — | (22) | (90) | 19 | |||||||||||||||||||||||||||
| Core revenue (non-GAAP) | 157,997 | 157,691 | 135,620 | 125,596 | 121,293 | |||||||||||||||||||||||||||
| Noninterest expense (GAAP) | 80,983 | 77,149 | 68,843 | 65,424 | 62,800 | |||||||||||||||||||||||||||
| Less amortization on intangibles | 1,239 | 1,299 | 1,310 | 1,328 | 1,430 | |||||||||||||||||||||||||||
| Core noninterest expense (non-GAAP) | 79,744 | 75,850 | 67,533 | 64,096 | 61,370 | |||||||||||||||||||||||||||
| Core efficiency ratio (non-GAAP) | 50.47 | % | 48.10 | % | 49.80 | % | 51.03 | % | 50.60 | % | ||||||||||||||||||||||
| Quarter ended | ||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||||||||||||||||||||||||
| TANGIBLE COMMON EQUITY, TANGIBLE BOOK VALUE PER SHARE AND TANGIBLE COMMON EQUITY RATIO | ||||||||||||||||||||||||||||||||
| Shareholders’ equity | $ | 1,592,820 | $ | 1,522,263 | $ | 1,446,218 | $ | 1,447,412 | $ | 1,473,177 | ||||||||||||||||||||||
| 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 | 15,680 | 16,919 | 18,217 | 19,528 | 20,855 | |||||||||||||||||||||||||||
| Tangible common equity | $ | 1,139,988 | $ | 1,068,192 | $ | 990,849 | $ | 990,732 | $ | 1,015,170 | ||||||||||||||||||||||
| Less net unrealized losses on HTM portfolio, after tax of 25.2% | 48,630 | 61,435 | 81,752 | 60,512 | 36,095 | |||||||||||||||||||||||||||
| Tangible common equity adjusted for unrealized losses on HTM securities | $ | 1,091,358 | $ | 1,006,757 | $ | 909,097 | $ | 930,220 | $ | 979,075 | ||||||||||||||||||||||
| Common shares outstanding | 37,311 | 37,253 | 37,223 | 37,206 | 37,516 | |||||||||||||||||||||||||||
| Tangible book value per share | $ | 30.55 | $ | 28.67 | $ | 26.62 | $ | 26.63 | $ | 27.06 | ||||||||||||||||||||||
| Total assets | $ | 13,325,982 | $ | 13,054,172 | $ | 12,994,787 | $ | 13,084,506 | $ | 13,706,769 | ||||||||||||||||||||||
| Less goodwill | 365,164 | 365,164 | 365,164 | 365,164 | 365,164 | |||||||||||||||||||||||||||
| Less intangible assets | 15,680 | 16,919 | 18,217 | 19,528 | 20,855 | |||||||||||||||||||||||||||
| Tangible assets | $ | 12,945,138 | $ | 12,672,089 | $ | 12,611,406 | $ | 12,699,814 | $ | 13,320,750 | ||||||||||||||||||||||
| Tangible common equity to tangible assets | 8.81 | % | 8.43 | % | 7.86 | % | 7.80 | % | 7.62 | % | ||||||||||||||||||||||
| Tangible common equity to tangible assets adjusted for unrealized losses on HTM securities | 8.43 | % | 7.94 | % | 7.21 | % | 7.32 | % | 7.35 | % | ||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||||||||||||||||||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) | ||||||||||||||||||||||||||||||||
| Average shareholder’s equity | $ | 1,568,451 | $ | 1,490,592 | $ | 1,494,504 | $ | 1,474,267 | $ | 1,536,221 | ||||||||||||||||||||||
| Less average preferred stock | 71,988 | 71,988 | 71,988 | 71,988 | 71,988 | |||||||||||||||||||||||||||
| Less average goodwill | 365,164 | 365,164 | 365,164 | 365,164 | 365,164 | |||||||||||||||||||||||||||
| Less average intangible assets | 16,247 | 17,544 | 18,857 | 20,175 | 21,540 | |||||||||||||||||||||||||||
| Average tangible common equity | $ | 1,115,052 | $ | 1,035,896 | $ | 1,038,495 | $ | 1,016,940 | $ | 1,077,529 | ||||||||||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 54,800 | $ | 59,064 | $ | 49,263 | $ | 44,211 | $ | 46,464 | ||||||||||||||||||||||
| ROATCE | 19.93 | % | 22.62 | % | 18.82 | % | 17.44 | % | 17.49 | % | Quarter ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| ($ in thousands) | Mar 31,<br>2023 | Dec 31,<br>2022 | Sep 30,<br>2022 | Jun 30,<br>2022 | Mar 31,<br>2022 | |||||||||||||||||||||||||||
| CALCULATION OF PRE-PROVISION NET REVENUE (PPNR) | ||||||||||||||||||||||||||||||||
| Net interest income | $ | 139,529 | $ | 138,835 | $ | 124,290 | $ | 109,613 | $ | 101,165 | ||||||||||||||||||||||
| Noninterest income | 16,898 | 16,873 | 9,454 | 14,194 | 18,641 | |||||||||||||||||||||||||||
| Less gain on sale of investment securities | 381 | — | — | — | — | |||||||||||||||||||||||||||
| Less gain (loss) on sale of other real estate owned | 90 | — | (22) | (90) | 19 | |||||||||||||||||||||||||||
| Less noninterest expense | 80,983 | 77,149 | 68,843 | 65,424 | 62,800 | |||||||||||||||||||||||||||
| PPNR | $ | 74,973 | $ | 78,559 | $ | 64,923 | $ | 58,473 | $ | 56,987 | ||||||||||||||||||||||
| Average assets | $ | 13,131,195 | $ | 12,986,568 | $ | 13,158,121 | $ | 13,528,474 | $ | 13,614,003 | ||||||||||||||||||||||
| ROAA - GAAP net income | 1.72 | % | 1.83 | % | 1.51 | % | 1.34 | % | 1.42 | % | ||||||||||||||||||||||
| PPNR ROAA - PPNR | 2.32 | % | 2.40 | % | 1.96 | % | 1.73 | % | 1.70 | % |
17
q12023efscearningsreleas
Enterprise Financial Services Corp 2023 First Quarter Earnings Webcast Exhibit 99.2
Forward-Looking Statements Some of the information in this report may contain “forward-looking statements” within the meaning of and intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include projections 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” 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 Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, including the COVID-19 pandemic, and their effects on economic and business environments in which we operate, including the ongoing disruption to the financial market and other economic activity caused by the continuing COVID-19 pandemic, 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, 2022, 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. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only, are not forecasts and may not reflect actual results. 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. 2
Financial Highlights - 1Q23* Capital • Tangible Common Equity/Tangible Assets** 8.81%, compared to 8.43% • Tangible Book Value Per Common Share $30.55, compared to $28.67 • CET1 Ratio 11.2%, compared to 11.1% • Quarterly common stock dividend of $0.25 per share in first quarter 2023 • Quarterly preferred stock dividend of $12.50 per share ($0.3125 per depositary share) • Net Income $55.7 million, down $4.3 million; EPS $1.46 • Net Interest Income $139.5 million, up $0.7 million; NIM 4.71% • PPNR** $75.0 million, down $3.6 million • ROAA 1.72%, compared to 1.83%; PPNR ROAA** 2.32%, compared to 2.40% • ROATCE** 19.93%, compared to 22.62% Earnings *Comparisons noted below are to the linked quarter unless otherwise noted. **A Non-GAAP Measure, Refer to Appendix for Reconciliation. 3
Financial Highlights, continued - 1Q23* *Comparisons noted below are to the linked quarter unless otherwise noted. ** Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated accounts. Loans & Deposits • Loans $10.0 billion, up $274.8 million • Loan/Deposit Ratio 90% • Deposits $11.2 billion, up $325.5 million, or $75 million excluding brokered CDs • Estimated uninsured deposits of $3.4 billion**, or 31% of total deposits • Noninterest-bearing Deposits/Total Deposits 38% Asset Quality • Nonperforming Loans/Loans 0.12% • Nonperforming Assets/Assets 0.09% • Allowance Coverage Ratio 1.38%; 1.53% adjusted for guaranteed loans 4
Areas of Focus Organic Loan and Deposit Growth Disciplined Loan and Deposit Pricing Maintain Strong Asset Quality Maintain a Strong Balance Sheet Opportunistic Talent Additions 5
$9,056 $9,269 $9,355 $9,737 $10,012 1Q22 2Q22 3Q22 4Q22 1Q23 In Millions 11% Total Loan Growth Total Loan Trends PPP $49PPP $134 PPP $13 6
Loan Details - LTM 1Q23 1Q22 LTM Change C&I $ 2,006 $ 1,438 $ 568 CRE Investor Owned 2,240 1,983 257 CRE Owner Occupied 1,174 1,138 36 SBA loans* 1,316 1,250 66 Sponsor Finance* 678 641 37 Life Insurance Premium Financing* 860 696 164 Tax Credits* 547 518 29 Residential Real Estate 349 410 (61) Construction and Land Development 590 611 (21) Other 247 237 10 Subtotal $ 10,007 $ 8,922 $ 1,085 SBA PPP loans 5 134 (129) Total Loans $ 10,012 $ 9,056 $ 956 *Specialty loan category. In Millions 7
Loan Details - QTR 1Q23 4Q22 QTR Change C&I $ 2,006 $ 1,905 $ 101 CRE Investor Owned 2,240 2,176 64 CRE Owner Occupied 1,174 1,174 — SBA loans* 1,316 1,312 4 Sponsor Finance* 678 635 43 Life Insurance Premium Financing* 860 817 43 Tax Credits* 547 560 (13) Residential Real Estate 349 380 (31) Construction and Land Development 590 535 55 Other 247 236 11 Subtotal $ 10,007 $ 9,730 $ 277 SBA PPP loans 5 7 (2) Total Loans $ 10,012 $ 9,737 $ 275 *Specialty loan category. In Millions 8
Total Loans By Region Specialty Lending $3,041 $3,382 $3,503 1Q22 4Q22 1Q23 In Millions Midwest $2,930 $3,214 $3,267 1Q22 4Q22 1Q23 Southwest $1,126 $1,242 $1,327 1Q22 4Q22 1Q23 Note: Excludes PPP and Other loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), West (Southern California) West $1,588 $1,656 $1,663 1Q22 4Q22 1Q23 9
Deposit Details - LTM 1Q23 1Q22 LTM Change Noninterest-bearing demand accounts $ 4,192 $ 4,881 $ (689) Interest-bearing demand accounts 2,396 2,547 (151) Money market accounts 2,960 2,795 165 Savings accounts 713 884 (171) Certificates of deposit: Brokered 370 129 241 Other 524 468 56 Total deposits $ 11,155 $ 11,704 $ (549) Specialty deposits (included in total deposits) $ 2,831 $ 2,495 $ 336 In Millions 10
Deposit Details - QTR 1Q23 4Q22 QTR Change Noninterest-bearing demand accounts $ 4,192 $ 4,643 $ (451) Interest-bearing demand accounts 2,396 2,256 140 Money market accounts 2,960 2,655 305 Savings accounts 713 744 (31) Certificates of deposit: Brokered 370 119 251 Other 524 412 112 Total Deposits $ 11,155 $ 10,829 $ 326 Specialty deposits (included in total deposits) $ 2,831 $ 2,524 $ 307 In Millions 11
Total Deposits By Region Specialty Deposits $2,495 $2,524 $2,831 1Q22 4Q22 1Q23 In Millions Midwest* $5,583 $4,940 $5,072 1Q22 4Q22 1Q23 Southwest $1,952 $1,845 $1,835 1Q22 4Q22 1Q23 West $1,674 $1,520 $1,417 1Q22 4Q22 1Q23 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), West (Southern California) *Includes brokered balances 12
Specialty Deposits 39.5% 23.8% 19.2% 2.7% 14.8% Community Associations $1.1 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $673 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third-Party Escrow $545 million in deposits. Growing product line providing independent escrow services. Trust Services $77 million in deposit accounts. Providing services to nondepository trust companies. Specialty deposits of $2.8 billion represent 25% of total deposits. Includes high composition of noninterest-bearing deposits with a low cost of funds. Other $417 million in deposit accounts primarily related to Sponsor Finance and Life Insurance Premium Finance loans. 1Q22 2Q22 3Q22 4Q22 1Q23 Community Assoc Property Mgmt Third- Party Escrow Trust Services Other $— $500 $1,000 In Millions 13
8% 33% 21% 22% 14% 2% Core Funding Mix Commercial Business Banking Consumer In Millions $2,849$1,343$3,528 Cost of Funds1 Commercial Business Banking Consumer Specialty Brokered Total 1.33% 0.41% 0.84% 1.03% 3.24% 1At March 31, 2023 2Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated accounts. Note: Brokered deposits: 1Q23 $604 million; 3.24% cost of funds 49% 22% 16% 12% Specialty $2,831 58% 2% 38% 1% 48% 25% 26%1Q23 Net New/Closed Deposit Accounts Commercial Business Banking Consumer Specialty Average balance ($ in thousands) 1Q23 $ 99,087 $ 41,931 $ 6,502 $ 106,043 4Q22 $ 104,743 $ 31,059 $ 48,646 $ 208,442 3Q22 $ 127,931 $ 19,413 $ 4,596 $ 221,198 2Q22 $ 79,062 $ 29,256 $ 22,957 $ 307,218 Number of accounts 1Q23 (46) (206) 188 1,190 4Q22 180 307 377 1,356 3Q22 219 390 968 1,597 2Q22 208 393 1,157 1,449 Total Portfolio Average Account Size & Cost of Funds ($ in thousands) Average account size $ 263 $ 70 $ 25 $ 147 Cost of funds1 1.33 % 0.41 % 0.84 % 1.03 % • Estimated uninsured deposits of $3.4 billion, or 31% of total deposits2 • ~80% of commercial deposits utilize Treasury Management services • ~90% of checking and savings accounts utilize online banking services • ~60% of commercial deposits have a lending relationship • ~ 120% of on- and off-balance sheet liquidity to estimated uninsured deposits Overview 14
Earnings Per Share Trend - 1Q23 $1.58 $0.01 $(0.05) $(0.08) $1.46 4Q22 Operating Revenue Provision for Credit Losses Noninterest Expense 1Q23 Change in EPS 15
$138.8 $139.5 $101.2 $109.6 $124.3 3.28% 3.55% 4.10% 4.66% 4.71% 0.12% 0.76% 2.20% 3.65% 4.52% Net Interest Income PPP Income Net Interest Margin Avg Fed Funds Rate 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income Trend In Millions 38% NII Growth PPP Income $0.5 PPP Income $2.9 PPP Income $1.6 16
Net Interest Margin 4.34% 4.51% 5.10% 5.87% 6.33% 2.31% 2.51% 2.65% 2.91% 3.03% 3.45% 3.76% 4.47% 5.25% 5.69% Earning asset yield Securities yield Loan yield 1Q22 2Q22 3Q22 4Q22 1Q23 0.54% 0.94% 1.56% 0.10% 0.13% 0.31% 0.53% 0.92% 0.30% 0.37% 0.67% 1.07% 1.72% Interest-bearing deposit rate Total cost of deposits Interest-bearing liabilities 1Q22 2Q22 3Q22 4Q22 1Q23 Components of Interest-bearing LiabilitiesComponents of Interest-earning Assets 4.66% 0.44% 0.03% (0.03)% (0.39)% 4.71% 4Q22 Loans Securities Other Earning Asset Mix Cost of Funds 1Q23 Margin Bridge 0.24%0.17% 17
Credit Trends 7 (1) 2 9 (1) 1Q22 2Q22 3Q22 4Q22 1Q23 $176 $298 $122 $388 $277 $(138) $(85) $(36) $(6) $(2) 39.9% 43.9% 42.5% 41.0% 42.4% Organic Loans PPP Loans Avg Line Draw % 1Q22 2Q22 3Q22 4Q22 1Q23 1Q23 4Q22 1Q22 NPLs/Loans 0.12% 0.10% 0.23% NPAs/Assets 0.09% 0.08% 0.17% ACL/NPLs 1155.2% 1371.9% 657.9% ACL/Loans** 1.53% 1.56% 1.73% Annualized Net Charge-offs (Recoveries) to Average Loans Provision for Credit Losses* $(4.1) $0.7 $0.7 $2.1 $4.2 1Q22 2Q22 3Q22 4Q22 1Q23 In Millions bps bps bps bps bps In Millions Loan Growth and Average Line of Credit Utilization *Includes credit loss expense on loans, investments and unfunded commitments. **Excludes guaranteed loans. 18
$136.9 $1.1 $0.3 $138.3 ACL 4Q22 Portfolio Changes Net Recoveries ACL 1Q23 Allowance for Credit Losses for Loans In Millions • New loans and changes in composition of existing loans • Changes in risk ratings, past due status and reserves on individually evaluated loans • Changes in macroeconomic and qualitative factors 1Q23 In Millions Loans ACL ACL as a % of Loans Commercial and industrial $ 4,032 $ 59 1.46 % Commercial real estate 4,699 58 1.23 % Construction real estate 664 9 1.36 % Residential real estate 364 7 1.92 % Other 253 5 1.98 % Total $ 10,012 $ 138 1.38 % Reserves on sponsor finance, which is included in the categories above, represented $21.0 million. Total ACL percentage of loans excluding PPP and other government guaranteed loans was 1.53%. Key Assumptions: • Reasonable and supportable forecast period is one year with a one year reversion period. • Forecast considers a weighted average of baseline, upside and downside scenarios. • Primary macroeconomic factors: ◦ Percentage change in GDP ◦ Unemployment ◦ Percentage change in Retail Sales ◦ Percentage change in CRE Index 19
Noninterest Income Trend Other Fee Income DetailFee Income In Millions $9.5 $18.6 $14.2 $16.9 $16.9 $2.6 $2.5 $2.4 $2.4 $2.5 $4.2 $4.8 $5.0 $4.5 $4.1 $3.0 $3.5 $2.7 $2.3 $2.3 $6.2 $2.2 $3.0 $5.3 $6.1 $2.6 $1.2 $(3.6) $2.4 $1.8 15.6% 11.5% 7.1% 10.8% 10.8% Wealth Management Deposit Services Charge Card Services Other Tax Credit Income Fee income/Total income 1Q22 2Q22 3Q22 4Q22 1Q23 $6.2 $2.2 $3.0 $5.3 $6.1 $0.6 $0.7 $1.2 $0.9 $1.7$0.7 $0.2 $0.6 $0.2 $0.5 $1.0 $0.7 $0.8 $0.8 $0.8 $1.2 $0.1 $0.2 $0.2 $0.3 $2.2 $0.2 $2.8 $0.6 $0.4 $1.7 $0.5 $0.3 Miscellaneous Servicing Fees BOLI Swap Fees CDE Private Equity Fund Distribution Gain on SBA loan sales Mortgage 1Q22 2Q22 3Q22 4Q22 1Q23 $0.2 $0.2 $0.2 20
Operating Expenses Trend Other Operating Expenses DetailOperating Expenses In Millions $62.8 $65.4 $68.8 $77.1 $81.0 $22.4 $25.1 $27.3 $34.7 $34.4 $4.6 $4.3 $4.5 $4.2 $4.1 $35.8 $36.0 $37.0 $38.2 $42.5 50.6% 51.0% 49.8% 48.1% 50.5% Other Occupancy Employee compensation and benefits Merger-related expenses Branch-closure expenses Core efficiency ratio* 1Q22 2Q22 3Q22 4Q22 1Q23 $22.4 $25.1 $27.3 $34.7 $34.4 $8.6 $9.2 $9.4 $11.2 $10.7 $4.3 $5.9 $7.7 $13.3 $12.7 $3.3 $3.1 $3.5 $3.6 $3.7 $1.2 $1.5 $1.6 $2.8 $1.6 $1.9 $1.6 $2.0 $1.6 $2.6 $1.7 $2.5 $1.8 $0.9 $1.9 $1.4 $1.3 $1.3 $1.3 $1.2 Miscellaneous Deposit costs Data processing Professional fees FDIC and other insurance Loan, legal expenses Amortization expense 1Q22 2Q22 3Q22 4Q22 1Q23 21
Capital Tangible Common Equity/Tangible Assets* 7.62% 7.80% 7.86% 8.43% 8.81% Tangible Common Equity/Tangible Assets 1Q22 2Q22 3Q22 4Q22 1Q23 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. Regulatory Capital 10.0% 14.4% 14.2% 14.2% 14.2% 14.3% 6.5% 11.0% 10.9% 11.0% 11.1% 11.2% CET1 Tier 1 Total Risk Based Capital Minimum "Well Capitalized" Ratio 1Q22 2Q22 3Q22 4Q22 1Q23 8.0% 12.7% 12.5% 12.6% 12.6% EFSC Capital Strategy: Low Cost - Highly Flexible High Capital Retention Rate – Strong earnings profile – Sustainable dividend profile Supporting Robust Asset Growth – Organic loan and deposit growth – High quality M&A to enhance commercial franchise and geographic diversification Maintain High Quality Capital Stack – Minimize WACC over time (preferred, sub debt, etc.) – Optimize capital levels CET1 ~10%, Tier 1 ~12%, and Total Capital ~14% Maintain 8-9% TCE – Common stock repurchases – M&A deal structures – Drives ROATCE above peer levels TBV and Dividends per Share $27.06 $26.63 $26.62 $28.67 $30.55 $0.21 $0.22 $0.23 $0.24 $0.25 TBV/Share Dividends per Share 1Q22 2Q22 3Q22 4Q22 1Q23 12.6% 22
Investment Portfolio Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 12% Obligations of states and political subdivisions 43% Agency mortgage- backed securities, 31% Corporate debt securities 5% U.S. Treasury bills 9% TOTAL $2.3 Billion • Effective duration of 5.5 years balances the short 3-year duration of the loan portfolio • Cash flows next 12 months of approximately $260 million • 3.03% tax-equivalent yield • Municipal bond portfolio rated A or better • Laddered maturity and repayment structure for consistent cash flows Overview Total AFS (Fair Value) Total HTM (Fair Value) AFS Securities (Net Unrealized) HTM Securities (Net Unrealized) 1Q22 2Q22 3Q22 4Q22 1Q23 $— $600 $1,200 $1,800 $(240) $(160) $(80) $— In Millions $315.0 $313.2 $123.2 $158.8 $101.3 1.78% 3.21% 3.68% 5.22% 4.79% Principal Cost Yield (TEQ) 1Q22 2Q22 3Q22 4Q22 1Q23 Investment Purchase Yield In Millions 23
Liquidity EFSC Borrowing Capacity $3.7 $3.7 $4.1 $0.8 $0.8 $0.8 $1.4 $1.4 $2.7$0.1 $0.1 $0.1 $1.4 $1.4 $0.5 34% 34% 37% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 3Q22 4Q22 1Q23 In Billions End of Period and Average Loans to Deposits 77% 84% 85% 90% 90% 78% 79% 83% 86% 90% End of period Loans/Deposits Avg Loans/Avg Deposits 1Q22 2Q22 3Q22 4Q22 1Q23 • $824 million available FHLB capacity • $2.7 billion available FRB capacity • $140 million in seven federal funds lines • $449 million unpledged investment securities • $285 million cash • $25 million available line of credit • Portfolio of saleable SBA loans • Investment portfolio/total assets of 17% • FHLB maximum credit capacity is 45% of assets $0.3 $0.2 $0.3 $0.3 $0.2 $0.3 $0.5 $0.8 $1.0 $1.3 Annual Cash Flows Cumulative Cash Flows 2024 2025 2026 2027 2028 Investment Portfolio Cash Flows* In Billions Strong Liquidity Profile *Trailing 12 months ending March 31 of each year 24
Appendix First Quarter 2023 Earnings Webcast
Office CRE (Investor-0wned) Total $483.6 Million Midwest 56.7% Southwest 25.2% West 12.4% Specialty 5.7% Office CRE Loans by Location Real Estate/ Rental/Leasing 85.2% Information 1.8% Health Care and Social Assistance 3.5% Professional Services 1.8% Retail Trade 1.7% Finance and Insurance 1.2% Other 4.8% Office CRE Loans by Industry Type Size Average Risk Rating Number of Loans Balance Average Balance > $10 Million 5.20 10 $ 149.0 $ 14.9 $5-10 Million 4.92 12 79.6 6.6 $2-5 Million 5.11 45 131.3 2.9 < $2 Million 5.19 221 123.7 0.5 Total 5.17 288 $ 483.6 $ 1.8 Office CRE Loans by Size $ In Millions • Average loan-to-origination value 49% • 71% of loans have recourse to owners • Average debt-service coverage ratio (DSCR) of 1.48x (2022) • Average market occupancy of 88% and average rents of $24 psf • 42% Class A, 54% Class B, 4% Class C 26
Use of Non-GAAP Financial Measures The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common equity, ROATCE, PPNR, PPNR return on average assets (“PPNR ROAA”), core efficiency ratio, the tangible common equity ratio, and tangible book value per common share, in this presentation 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, ROATCE, PPNR, PPNR ROAA, core efficency ratio, the tangible common equity ratio, and tangible book value per common share, collectively “core performance measures,” presented in this report 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 include exclude certain other income and expense items, such as merger related expenses, facilities charges, and the gain or loss on sale of 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 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. 27
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,592,820 $ 1,522,263 $ 1,446,218 $ 1,447,412 $ 1,473,177 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 15,680 16,919 18,217 19,528 20,855 Tangible common equity $ 1,139,988 $ 1,068,192 $ 990,849 $ 990,732 $ 1,015,170 Less net unrealized losses on HTM portfolio, after tax of 25.2% 48,630 61,435 81,752 60,512 36,095 Tangible common equity adjusted for unrealized losses on HTM securities $ 1,091,358 $ 1,006,757 $ 909,097 $ 930,220 $ 979,075 Common shares outstanding $ 37,311 $ 37,253 $ 37,223 $ 37,206 $ 37,516 Tangible book value per share $ 30.55 $ 28.67 $ 26.62 $ 26.63 $ 27.06 Total assets $ 13,325,982 $ 13,054,172 $ 12,994,787 $ 13,084,506 $ 13,706,769 Less goodwill 365,164 365,164 $ 365,164 365,164 365,164 Less intangible assets 15,680 16,919 $ 18,217 19,528 20,855 Tangible assets $ 12,945,138 $ 12,672,089 $ 12,611,406 $ 12,699,814 $ 13,320,750 Tangible common equity to tangible assets 8.81 % 8.43 % 7.86 % 7.80 % 7.62 % Tangible common equity to tangible assets adjusted for unrealized losses on HTM securities 8.43 % 7.94 % 7.21 % 7.32 % 7.35 % CET1 RATIO ADJUSTED FOR UNREALIZED LOSSES CET1 capital $ 1,267,029 Less unrealized losses on investment portfolio, after tax of 25.2% 169,486 CET1 capital excluding unrealized losses on securities $ 1,097,543 Total risk-weighted assets $ 11,329,247 CET1 capital to risk-weighted assets 11.2 % CET1 capital excluding unrealized losses to risk-weighted assets 9.7 % 28
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 CALCULATION OF PRE-PROVISION NET REVENUE Net interest income $ 139,529 $ 138,835 $ 124,290 $ 109,613 $ 101,165 Noninterest income 16,898 16,873 9,454 14,194 18,641 Less gain on sale of investment securities 381 — — — — Less gain (loss) on sale of other real estate owned 90 — (22) (90) 19 Less noninterest expense 80,983 77,149 68,843 65,424 62,800 PPNR $ 74,973 $ 78,559 $ 64,923 $ 58,473 $ 56,987 Average assets $ 13,131,195 $ 12,986,568 $ 13,158,121 $ 13,528,474 $ 13,614,003 ROAA - GAAP net income 1.72 % 1.83 % 1.51 % 1.34 % 1.42 % PPNR ROAA - PPNR 2.32 % 2.40 % 1.96 % 1.73 % 1.70 % Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) Average shareholder’s equity $ 1,568,451 $ 1,490,592 $ 1,494,504 $ 1,474,267 $ 1,536,221 Less average preferred stock 71,988 71,988 71,988 71,988 71,988 Less average goodwill 365,164 365,164 365,164 365,164 365,164 Less average intangible assets 16,247 17,544 18,857 20,175 21,540 Average tangible common equity $ 1,115,052 $ 1,035,896 $ 1,038,495 $ 1,016,940 $ 1,077,529 Net income available to common shareholders $ 54,800 $ 59,064 $ 49,263 $ 44,211 $ 46,464 ROATCE 19.93 % 22.62 % 18.82 % 17.44 % 17.49 % 29
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 CORE EFFICIENCY RATIO Net interest income (GAAP) $ 139,529 $ 138,835 $ 124,290 $ 109,613 $ 101,165 Tax-equivalent adjustment 2,041 1,983 1,854 1,699 1,506 Net interest income - FTE (non-GAAP) 141,570 140,818 126,144 111,312 102,671 Noninterest income (GAAP) 16,898 16,873 9,454 14,194 18,641 Less gain on sale of investment securities 381 — — — — Less gain (loss) on sale of other real estate owned 90 — (22) (90) 19 Core revenue (non-GAAP) 157,997 157,691 135,620 125,596 121,293 Noninterest expense (GAAP) 80,983 77,149 68,843 65,424 62,800 Less amortization on intangibles 1,239 1,299 1,310 1,328 1,430 Core noninterest expense (non-GAAP) 79,744 75,850 67,533 64,096 61,370 Core efficiency ratio (non-GAAP) 50.47 % 48.10 % 49.80 % 51.03 % 50.60 % 30
Q & A First Quarter 2023 Earnings Webcast