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 22, 2024
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 22, 2024, Enterprise Financial Services Corp (the "Company" or "EFSC") issued a press release announcing financial information for the quarter ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
On April 23, 2024, 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, 2024. 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 22, 2024.
99.2 Presentation to be conducted April 23, 2024.
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 22, 2024 | By: | /s/ Troy R. Dumlao |
| Troy R. Dumlao | |||
| Executive Vice President and Chief Accounting Officer |
Document
EXHIBIT 99.1
ENTERPRISE FINANCIAL REPORTS FIRST QUARTER 2024 RESULTS
First Quarter Results
•Net income of $40.4 million, or $1.05 per diluted common share, compared to $1.16 in the linked quarter and $1.46 in the prior year quarter
•Net interest margin of 4.13%, quarterly decrease of 10 basis points
•Net interest income of $137.7 million, quarterly decrease of $3.0 million
•Total loans of $11.0 billion, quarterly increase of $144.4 million
•Total deposits of $12.3 billion, quarterly increase of $77.3 million
•Return on Average Assets (“ROAA”) of 1.12%, compared to 1.23% and 1.72% in the linked and prior year quarters, respectively
•Return on Average Tangible Common Equity (“ROATCE”)1 of 12.31%, compared to 14.38% and 19.93% in the linked and prior year quarters, respectively
•Tangible common equity to tangible assets1 of 9.01%, an increase of 5 basis points and 20 basis points from the linked and prior year quarters, respectively
•Tangible book value per share1 of $34.21, annualized increase of 4%
St. Louis, Mo. April 22, 2024 – Jim Lally, President and Chief Executive Officer of Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”), said today upon the release of EFSC’s first quarter earnings, “Our first quarter results were fundamentally sound and 2024 is off to a good start. Customer activity remains robust, and our loan and deposit pipelines are strong. We had a return on average assets of 1.12% and grew tangible common equity to over 9% of tangible assets. Credit quality metrics are stable and we continue to maintain an appropriate reserve level. We are excited about the opportunities in our markets and are optimistic for the remainder of the year.”
Highlights
•Earnings - Net income in the first quarter 2024 was $40.4 million, a decrease of $4.1 million and $15.3 million compared to the linked and prior year quarters, respectively. Earnings per share (“EPS”) was $1.05 per diluted common share for the first quarter 2024, compared to $1.16 and $1.46 per diluted common share for the linked and prior year quarters, respectively. Adjusted diluted earnings per share1 was $1.07 for the first quarter 2024, compared to $1.21 for the linked quarter.
•Pre-provision net revenue (“PPNR”)1 - PPNR of $57.4 million in the first quarter 2024 decreased $18.4 million and $17.6 million from the linked and prior year quarters, respectively. The decrease from the linked quarter was primarily due to a decrease in net interest income due to one less day in the current quarter and an increase in interest expense, a decrease in tax credit income that is typically highest in the fourth quarter of each year, and an increase in compensation and benefits from the annual payroll tax and vacation reset, along with merit increases. The decrease compared to the prior year quarter was primarily
1 ROATCE, tangible common equity to tangible assets, tangible book value per share, adjusted diluted earnings per share and PPNR are non-GAAP measures. Please refer to discussion and reconciliation of these measures in the accompanying financial tables.
due to the higher interest rate environment that increased deposit interest expense and the cost of variable deposit services charges, which are influenced by current market rates.
•Net interest income and net interest margin (“NIM”) - Net interest income of $137.7 million for the first quarter 2024 decreased $3.0 million and $1.8 million from the linked and prior year quarters, respectively. NIM was 4.13% for the first quarter 2024, compared to 4.23% and 4.71% for the linked and prior year quarters, respectively. The total cost of deposits of 2.13% for the first quarter 2024 increased 10 basis points and 121 basis points from the linked and prior year quarters, respectively. Compared to the linked quarter, net interest income declined due to one less day in the current quarter and higher deposit interest expense, partially offset by higher average loan and investment balances.
•Noninterest income - Noninterest income of $12.2 million for the first quarter 2024 decreased $13.3 million and $4.7 million from the linked and prior year quarters, respectively. The decline from the linked and prior year quarters was primarily due to a decrease in tax credit income on lower activity and an increase in market interest rates that reduced the fair value of certain tax credits.
•Noninterest expense - Noninterest expense of $93.5 million for the first quarter 2024 increased $0.9 million and $12.5 million from the linked and prior year quarters, respectively. The increase from the linked quarter was primarily driven by employee compensation, partially offset by a decrease in the FDIC special assessment and variable deposit servicing costs. The increase from the prior year quarter was primarily due to variable deposit servicing costs and employee compensation.
•Loans - Loans totaled $11.0 billion at March 31, 2024, an increase of $144.4 million, or 5.3% on an annualized basis, from the linked quarter and an increase of $1.0 billion from the prior year quarter. Average loans totaled $10.9 billion for the quarter ended March 31, 2024, compared to $10.7 billion and $9.8 billion for the linked and prior year quarters, respectively.
•Asset quality - The allowance for credit losses to total loans was 1.23% at March 31, 2024, compared to 1.24% at December 31, 2023 and 1.38% at March 31, 2023. The ratio of nonperforming assets to total assets was 0.30% at March 31, 2024, compared to 0.34% and 0.09% at December 31, 2023 and March 31, 2023, respectively. The provision for credit losses recorded in the first quarter 2024 was $5.8 million, compared to $18.1 million and $4.2 million for the linked and prior year quarters, respectively.
•Deposits - Total deposits increased $77.3 million from December 31, 2023 to $12.3 billion at March 31, 2024, including a $176.2 million increase in brokered certificates of deposit. Average deposits were $12.2 billion for both the current and linked quarters and $10.9 billion for the prior year quarter. At March 31, 2024, noninterest-bearing deposit accounts totaled $3.8 billion, or 31.1% of total deposits, and the loan to deposit ratio was 90.0%.
•Liquidity - The Company’s total available on- and off-balance-sheet liquidity was approximately $5.6 billion at March 31, 2024. On-balance-sheet liquidity consisted of cash of $369.4 million and $1.1 billion in unpledged investment securities at March 31, 2024. Off-balance-sheet liquidity consisted of $1.3 billion available through the Federal Home Loan Bank, $2.6 billion available through the Federal Reserve and $120.0 million through correspondent bank lines. The Company also has an unused $25.0 million revolving line of credit and maintains a shelf registration allowing for the issuance of various forms of equity and debt securities.
•Capital - Total shareholders’ equity was $1.7 billion and the tangible common equity to tangible assets ratio2 was 9.01% at March 31, 2024, compared to 8.96% at December 31, 2023. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.1% and a total risk-based capital ratio of 13.2% at March 31, 2024. The Company’s common equity tier 1 ratio and total risk-based capital ratio were 11.4% and 14.3%, respectively, at March 31, 2024.
The Company’s board of directors approved a quarterly dividend of $0.26 per common share, payable on June 28, 2024 to shareholders of record as of June 14, 2024. The board of directors also declared a cash dividend of $12.50 per share of Series A Preferred Stock (or $0.3125 per depositary share) representing a 5% per annum rate for the period commencing (and including) March 15, 2024 to (but excluding) June 15, 2024. The dividend will be payable on June 15, 2024 and will be paid on June 17, 2024 to holders of record of Series A Preferred Stock as of June 3, 2024.
2 Tangible common equity to tangible assets ratio is a non-GAAP measure. Please refer to discussion and reconciliation of this measure in the accompanying financial tables.
Net Interest Income and NIM
Average Balance Sheets
The following table presents, for the periods indicated, certain information related to the Company’s 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, 2023 | March 31, 2023 | ||||||||||||||||
| ( 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 | 10,927,932 | $ | 186,703 | 6.87 | % | $ | 10,685,961 | $ | 184,982 | 6.87 | % | $ | 9,795,045 | $ | 152,762 | 6.33 | % |
| Securities2 | 19,491 | 3.27 | 2,276,915 | 18,385 | 3.20 | 2,288,451 | 17,117 | 3.03 | |||||||||
| Interest-earning deposits | 3,569 | 5.35 | 420,762 | 5,631 | 5.31 | 106,254 | 1,195 | 4.56 | |||||||||
| Total interest-earning assets | 209,763 | 6.20 | 13,383,638 | 208,998 | 6.20 | 12,189,750 | 171,074 | 5.69 | |||||||||
| Noninterest-earning assets | 949,166 | 941,445 | |||||||||||||||
| Total assets | 14,556,119 | $ | 14,332,804 | $ | 13,131,195 | ||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing demand accounts | 2,924,276 | $ | 18,612 | 2.56 | % | $ | 2,844,847 | $ | 17,248 | 2.41 | % | $ | 2,201,910 | $ | 5,907 | 1.09 | % |
| Money market accounts | 31,357 | 3.71 | 3,342,979 | 30,579 | 3.63 | 2,826,836 | 15,471 | 2.22 | |||||||||
| Savings accounts | 303 | 0.21 | 609,645 | 268 | 0.17 | 732,256 | 230 | 0.13 | |||||||||
| Certificates of deposit | 14,201 | 4.26 | 1,373,808 | 14,241 | 4.11 | 670,521 | 3,053 | 1.85 | |||||||||
| Total interest-bearing deposits | 64,473 | 3.14 | 8,171,279 | 62,336 | 3.03 | 6,431,523 | 24,661 | 1.56 | |||||||||
| Subordinated debentures and notes | 2,484 | 6.40 | 155,907 | 2,475 | 6.30 | 155,497 | 2,409 | 6.28 | |||||||||
| FHLB advances | 1,029 | 5.61 | — | — | — | 110,928 | 1,332 | 4.87 | |||||||||
| Securities sold under agreements to repurchase | 1,804 | 3.54 | 150,827 | 1,226 | 3.22 | 215,604 | 749 | 1.41 | |||||||||
| Other borrowings | 205 | 1.93 | 49,013 | 314 | 2.54 | 53,885 | 353 | 2.66 | |||||||||
| Total interest-bearing liabilities | 69,995 | 3.22 | 8,527,026 | 66,351 | 3.09 | 6,967,437 | 29,504 | 1.72 | |||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||
| Demand deposits | 3,992,067 | 4,481,966 | |||||||||||||||
| Other liabilities | 160,829 | 113,341 | |||||||||||||||
| Total liabilities | 12,679,922 | 11,562,744 | |||||||||||||||
| Shareholders' equity | 1,652,882 | 1,568,451 | |||||||||||||||
| Total liabilities and shareholders' equity | 14,556,119 | $ | 14,332,804 | $ | 13,131,195 | ||||||||||||
| Total net interest income | $ | 139,768 | $ | 142,647 | $ | 141,570 | |||||||||||
| Net interest margin | 4.13 | % | 4.23 | % | 4.71 | % | |||||||||||
| 1 Average balances include nonaccrual loans. Interest income includes loan fees of 2.4 million, 3.1 million, and 3.7 million for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively. | |||||||||||||||||
| 2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were 2.0 million, 1.9 million, and 2.0 million for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively. |
All values are in US Dollars.
Net interest income for the first quarter 2024 was $137.7 million, a decrease of $3.0 million and $1.8 million from the linked and prior year quarters, respectively. Net interest income on a tax equivalent basis was $139.8 million, $142.6 million and $141.6 million for the current, linked and prior year quarters, respectively. The decrease from the linked quarter was primarily due to the impact of competitive deposit pricing, continued remixing into higher cost deposit categories and an increase in wholesale borrowings. The decrease from the prior year quarter reflects higher interest expense on the deposit portfolio, as lagged deposit rates have increased, partially offset by the benefit of higher market interest rates on interest-earning assets and organic growth.
Interest income increased $0.6 million during the first quarter 2024. Interest on loans benefited from a $242.0 million increase in average loan balances compared to the linked quarter. The average interest rate of new loan originations in the first quarter 2024 was 7.84%. Interest on cash accounts decreased $2.1 million from the linked quarter due to a decline in average balances, while interest on securities increased $1.0 million due to an increase in both the average balance and yield due to the reinvestment of cash flows from the portfolio.
Interest expense increased $3.6 million in the first quarter 2024 primarily due to a $2.1 million increase in deposit interest expense and a $1.5 million increase in interest expense on borrowings. The increase in deposit interest expense reflects a shift in the deposit mix from demand deposits to interest-bearing deposits, particularly money market accounts and interest-bearing demand accounts, as well as higher rates paid on deposits. The average cost of interest-bearing deposits was 3.14%, an increase of 11 basis points compared to the linked quarter. The total cost of deposits, including noninterest-bearing demand accounts, was 2.13% during the first quarter 2024, compared to 2.03% in the linked quarter. The increase in interest expense on other borrowings was primarily due to higher average borrowings to fund net loan growth.
NIM, on a tax equivalent basis, was 4.13% in the first quarter 2024, a decrease of 10 basis points from the linked quarter and a decrease of 58 basis points from the prior year quarter. NIM in the first quarter 2024 was impacted by a $62.5 million improvement in the average unrealized loss on the investment portfolio, which reduced NIM by two basis points when compared to the linked quarter. For the month of March 2024, the loan portfolio yield was 6.89% and the cost of total deposits was 2.17%.
Investments
| Quarter ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||
| ($ in thousands) | Carrying Value | Net Unrealized Loss | Carrying Value | Net Unrealized Loss | Carrying Value | Net Unrealized Loss | ||||||
| Available-for-sale (AFS) | $ | 1,611,883 | $ | (165,586) | $ | 1,618,273 | $ | (150,861) | $ | 1,555,109 | $ | (161,572) |
| Held-to-maturity (HTM) | 758,017 | (63,593) | 750,434 | (54,572) | 720,694 | (65,013) | ||||||
| Total | $ | 2,369,900 | $ | (229,179) | $ | 2,368,707 | $ | (205,433) | $ | 2,275,803 | $ | (226,585) |
Investment securities totaled $2.4 billion at March 31, 2024, an increase of $1.2 million from the linked quarter. Investment purchases in the first quarter 2024 had a weighted average, tax equivalent yield of 5.21%. The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities3 was 8.68% at March 31, 2024, compared to 8.67% at December 31, 2023.
3 The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
Loans
The following table presents total loans for the most recent five quarters:
| At | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| C&I | $ | 2,263,817 | $ | 2,186,203 | $ | 2,020,303 | $ | 2,029,370 | $ | 2,005,539 | |||||
| CRE investor owned | 2,280,990 | 2,291,660 | 2,260,220 | 2,290,701 | 2,239,932 | ||||||||||
| CRE owner occupied | 1,279,929 | 1,262,264 | 1,255,885 | 1,208,675 | 1,173,985 | ||||||||||
| SBA loans* | 1,274,780 | 1,281,632 | 1,309,497 | 1,327,667 | 1,315,732 | ||||||||||
| Sponsor finance* | 865,180 | 872,264 | 888,000 | 879,491 | 677,529 | ||||||||||
| Life insurance premium financing* | 1,003,597 | 956,162 | 928,486 | 912,274 | 859,910 | ||||||||||
| Tax credits* | 718,383 | 734,594 | 683,580 | 609,137 | 547,513 | ||||||||||
| Residential real estate | 354,615 | 359,957 | 364,618 | 354,588 | 348,726 | ||||||||||
| Construction and land development | 726,742 | 670,567 | 639,555 | 599,375 | 590,509 | ||||||||||
| Other | 260,459 | 268,815 | 266,676 | 301,345 | 252,543 | ||||||||||
| Total loans | $ | 11,028,492 | $ | 10,884,118 | $ | 10,616,820 | $ | 10,512,623 | $ | 10,011,918 | |||||
| Quarterly loan yield | 6.87 | % | 6.87 | % | 6.80 | % | 6.64 | % | 6.33 | % | |||||
| Variable interest rate loans to total loans | 61 | % | 61 | % | 61 | % | 62 | % | 63 | % | |||||
| *Specialty loan category |
Loans totaled $11.0 billion at March 31, 2024, increasing $144.4 million, compared to the linked quarter. During the current quarter, C&I loans increased $77.6 million, construction loans increased $56.2 million and specialty loans increased $17.3 million, primarily due to growth in life insurance premium finance loans. Loan sales of $23.1 million mitigated growth in the SBA category during the current quarter. Average line utilization was approximately 44% for the quarter ended March 31, 2024, compared to 42% for the linked and prior year quarters.
Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:
| At | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31,<br>2024 | December 31,<br>2023 | September 30,<br>2023 | June 30,<br>2023 | March 31,<br>2023 | ||||||||||
| Nonperforming loans* | $ | 35,642 | $ | 43,728 | $ | 48,932 | $ | 16,112 | $ | 11,972 | |||||
| Other | 8,466 | 5,736 | 6,933 | — | 250 | ||||||||||
| Nonperforming assets* | $ | 44,108 | $ | 49,464 | $ | 55,865 | $ | 16,112 | $ | 12,222 | |||||
| Nonperforming loans to total loans | 0.32 | % | 0.40 | % | 0.46 | % | 0.15 | % | 0.12 | % | |||||
| Nonperforming assets to total assets | 0.30 | % | 0.34 | % | 0.40 | % | 0.12 | % | 0.09 | % | |||||
| Allowance for credit losses to total loans | 1.23 | % | 1.24 | % | 1.34 | % | 1.34 | % | 1.38 | % | |||||
| Quarterly net charge-offs (recoveries) | $ | 5,864 | $ | 28,479 | $ | 6,856 | $ | 2,973 | $ | (264) | |||||
| *Guaranteed balances excluded | $ | 9,630 | $ | 10,682 | $ | 5,974 | $ | 6,666 | $ | 6,835 |
Nonperforming assets decreased $5.4 million during the first quarter 2024 and increased $31.9 million from the prior year quarter. The decrease in nonperforming assets in the current quarter was driven primarily by gross charge-offs of $6.7 million, including $4.8 million on two relationships that moved to nonperforming status in the fourth quarter 2023. Included in that amount was $3.4 million related to the Agricultural relationship that was disclosed in the fourth quarter 2023 and has now been fully charged-off. The increase in nonperforming assets from the prior year quarter was primarily due to a $26.4 million increase in real estate loans and an $8.2 million increase in OREO and other repossessed assets, partially offset by a $2.8 million decrease in C&I loans. Annualized net
charge-offs totaled 22 basis points of average loans in the first quarter 2024, compared to 106 basis points in the linked quarter and a net recovery of 1 basis point in the prior year quarter.
The provision for credit losses totaled $5.8 million in the first quarter 2024, compared to $18.1 million and $4.2 million in the linked and prior year quarters, respectively. The provision for credit losses in the first quarter 2024 was primarily related to net charge-offs and updates to qualitative factors used in the allowance calculation. The decrease in the provision for credit losses from the linked quarter is commensurate to the decrease in charge-offs from the linked quarter.
The allowance for credit losses to total loans was 1.23% at March 31, 2024, compared to 1.24% and 1.38% at December 31, 2023 and March 31, 2023, respectively.
Deposits
The following table presents deposits broken out by type for the most recent five quarters:
| At | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Noninterest-bearing demand accounts | $ | 3,805,334 | $ | 3,958,743 | $ | 3,852,486 | $ | 3,880,561 | $ | 4,192,523 | |||||
| Interest-bearing demand accounts | 2,956,282 | 2,950,259 | 2,749,598 | 2,629,339 | 2,395,901 | ||||||||||
| Money market and savings accounts | 4,006,702 | 3,994,455 | 3,837,145 | 3,577,856 | 3,672,539 | ||||||||||
| Brokered certificates of deposit | 659,005 | 482,759 | 695,551 | 893,808 | 369,505 | ||||||||||
| Other certificates of deposit | 826,378 | 790,155 | 775,127 | 638,296 | 524,168 | ||||||||||
| Total deposit portfolio | $ | 12,253,701 | $ | 12,176,371 | $ | 11,909,907 | $ | 11,619,860 | $ | 11,154,636 | |||||
| Noninterest-bearing deposits to total deposits | 31.1 | % | 32.5 | % | 32.3 | % | 33.4 | % | 37.6 | % | |||||
| Quarterly cost of deposits | 2.13 | % | 2.03 | % | 1.84 | % | 1.46 | % | 0.92 | % |
Total deposits at March 31, 2024 were $12.3 billion, an increase of $77.3 million and $1.1 billion from the linked and prior year quarters, respectively. Excluding brokered certificates of deposits, total deposits declined $98.9 million and increased $809.6 million, from the linked and prior year quarters, respectively. The decrease in demand accounts in the first quarter 2024 was primarily related to normal, seasonal deposit outflows. Reciprocal deposits, which are placed through third party programs to provide FDIC insurance on larger deposit relationships, totaled $1.1 billion at March 31, 2024, compared to $1.2 billion at December 31, 2023.
Total estimated insured deposits4, which includes collateralized deposits, reciprocal accounts and accounts that qualify for pass-through insurance, totaled $8.7 billion, or 71% of total deposits, at March 31, 2024, compared to $8.3 billion, or 69% of total deposits, at December 31, 2023.
4 Estimated insured deposits is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
Noninterest Income
The following table presents a comparative summary of the major components of noninterest income for the periods indicated:
| Linked quarter comparison | Prior year comparison | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||
| ($ in thousands) | March 31, 2024 | December 31, 2023 | Increase (decrease) | March 31, 2023 | Increase (decrease) | |||||||||
| Deposit service charges | $ | 4,423 | $ | 4,334 | $ | 89 | 2 | % | $ | 4,128 | $ | 295 | 7 | % |
| Wealth management revenue | 2,544 | 2,428 | 116 | 5 | % | 2,516 | 28 | 1 | % | |||||
| Card services revenue | 2,412 | 2,666 | (254) | (10) | % | 2,338 | 74 | 3 | % | |||||
| Tax credit income (loss) | (2,190) | 9,688 | (11,878) | (123) | % | 1,813 | (4,003) | (221) | % | |||||
| Other income | 4,969 | 6,336 | (1,367) | (22) | % | 6,103 | (1,134) | (19) | % | |||||
| Total noninterest income | $ | 12,158 | $ | 25,452 | $ | (13,294) | (52) | % | $ | 16,898 | $ | (4,740) | (28) | % |
Total noninterest income was $12.2 million for the first quarter 2024, a decrease of $13.3 million from the linked quarter and a decrease of $4.7 million from the prior year quarter. The decrease from the linked and prior year quarters was primarily due to a decrease in tax credit income. Tax credit income is typically highest in the fourth quarter of each year and will vary in other periods based on transaction volumes and fair value changes on credits carried at fair value.
The following table presents a comparative summary of the major components of other income for the periods indicated:
| Linked quarter comparison | Prior year comparison | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||
| ($ in thousands) | March 31, 2024 | December 31, 2023 | Increase (decrease) | March 31, 2023 | Increase (decrease) | |||||||||
| Gain on SBA loan sales | $ | 1,415 | $ | — | $ | 1,415 | 100 | % | $ | 501 | $ | 914 | 182 | % |
| BOLI | 864 | 1,279 | (415) | (32) | % | 791 | 73 | 9 | % | |||||
| Community development investments | 585 | 1,027 | (442) | (43) | % | 595 | (10) | (2) | % | |||||
| Private equity fund distributions | 162 | 725 | (563) | (78) | % | 1,749 | (1,587) | (91) | % | |||||
| Servicing fees | 287 | 774 | (487) | (63) | % | 512 | (225) | (44) | % | |||||
| Swap fees | 45 | 163 | (118) | (72) | % | 250 | (205) | (82) | % | |||||
| Miscellaneous income | 1,611 | 2,368 | (757) | (32) | % | 1,705 | (94) | (6) | % | |||||
| Total other income | $ | 4,969 | $ | 6,336 | $ | (1,367) | (22) | % | $ | 6,103 | $ | (1,134) | (19) | % |
The decrease in other income from the linked quarter was primarily driven by lower community development and private equity distributions, BOLI income and servicing fees. Community development and private equity distributions are not consistent sources of income and fluctuate based on distributions from the underlying funds. BOLI income in the linked quarter included a policy benefit payment that did not recur. Servicing fee income fluctuates based on prepayment experience and changes to the discount rate used in the valuation of the servicing rights. These decreases were partially offset by a $1.4 million gain on the sale of SBA loans in the first quarter 2024.
Noninterest Expense
The following table presents a comparative summary of the major components of noninterest expense for the periods indicated:
| Linked quarter comparison | Prior year comparison | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended | Quarter ended | |||||||||||||||
| ($ in thousands) | March 31, 2024 | December 31,<br>2023 | Increase (decrease) | March 31, 2023 | Increase (decrease) | |||||||||||
| Employee compensation and benefits | $ | 45,262 | $ | 39,651 | $ | 5,611 | 14 | % | $ | 42,503 | $ | 2,759 | 6 | % | ||
| Deposit costs | 20,277 | 21,606 | (1,329) | (6) | % | 12,720 | 7,557 | 59 | % | |||||||
| Occupancy | 4,326 | 4,313 | 13 | — | % | 4,061 | 265 | 7 | % | |||||||
| FDIC special assessment | 625 | 2,412 | (1,787) | (74) | % | — | 625 | 100 | % | |||||||
| Core conversion expense | 350 | — | 350 | 100 | % | — | 350 | 100 | % | |||||||
| Other expense | 22,661 | 24,621 | (1,960) | (8) | % | 21,699 | 962 | 4 | % | |||||||
| Total noninterest expense | $ | 93,501 | $ | 92,603 | $ | 898 | 1 | % | $ | 80,983 | $ | 12,518 | 15 | % |
Employee compensation and benefits increased $5.6 million from the linked quarter primarily due to the annual reset of payroll taxes and vacation, along with annual merit increases that became effective March 1, 2024. The FDIC special assessment of $0.6 million and $2.4 million in the current and linked quarters, respectively, is an assessment from the FDIC to recover estimated losses in the Deposit Insurance Fund related to bank failures in 2023. The assessment may change in future periods as the FDIC updates its loss estimates. Deposit costs relate to certain specialized deposit businesses that receive an earnings credit allowance for deposit related expenses that are impacted by interest rates and average balances. Deposit costs decreased $1.3 million from the linked quarter primarily due to the expiration of certain allowances that were not used.
The increase in noninterest expense of $12.5 million from the prior year quarter was primarily due to an increase in the associate base, merit increases throughout 2023 and 2024, and an increase in variable deposit costs due to higher earnings credit rates and average balances.
For the first quarter 2024, the Company’s core efficiency ratio5 was 60.2%, compared to 53.1% for the linked quarter and 50.5% for the prior year quarter.
Income Taxes
The Company’s effective tax rate was 20.2%, compared to 19.8% and 21.8% in the linked and prior year quarters, respectively. The increase in the effective tax rate from the linked quarter was driven by a state apportionment adjustment that lowered the effective tax rate in the linked quarter, while the decrease from the prior year quarter was driven by tax credit opportunities the Company has deployed as part of its tax planning strategy.
5 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
Capital
The following table presents the Company’s total equity and various capital ratios for the most recent five quarters:
| At | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
| Shareholders’ equity | $ | 1,731,725 | $ | 1,716,068 | $ | 1,611,880 | $ | 1,618,233 | $ | 1,592,820 | |||||
| Total risk-based capital to risk-weighted assets | 14.3 | % | 14.2 | % | 14.1 | % | 14.1 | % | 14.3 | % | |||||
| Tier 1 capital to risk weighted assets | 12.8 | % | 12.7 | % | 12.6 | % | 12.5 | % | 12.6 | % | |||||
| Common equity tier 1 capital to risk-weighted assets | 11.4 | % | 11.3 | % | 11.2 | % | 11.1 | % | 11.2 | % | |||||
| Leverage ratio | 11.0 | % | 11.0 | % | 10.9 | % | 11.0 | % | 11.1 | % | |||||
| Tangible common equity to tangible assets | 9.01 | % | 8.96 | % | 8.51 | % | 8.65 | % | 8.81 | % |
*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 $1.7 billion at March 31, 2024, an increase of $15.7 million from the linked quarter. The Company’s tangible common book value per share was $34.21 at March 31, 2024, compared to $33.85 and $30.55 at December 31, 2023 and March 31, 2023, respectively.
The Company’s regulatory capital ratios continue to exceed the “well-capitalized” regulatory benchmark. Capital ratios for the current quarter are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.
Use of Non-GAAP Financial Measures
The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common equity, PPNR, ROATCE, core efficiency ratio, the tangible common equity ratio, tangible book value per common share, estimated insured deposits and adjusted diluted earnings per share, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
The Company considers its tangible common equity, PPNR, ROATCE, core efficiency ratio, the tangible common equity ratio, tangible book value per common share, estimated insured deposits and adjusted diluted earnings per share, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as the FDIC special assessment, core conversion expenses, merger-related expenses, facilities charges, and the gain or loss on 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.
Conference Call and Webcast Information
The Company will host a conference call and webcast at 10:00 a.m. Central Time on Tuesday, April 23, 2024. During the call, management will review the first quarter 2024 results and related matters. This press release as well as a related slide presentation will be accessible on the Company’s website at www.enterprisebank.com under “Investor Relations” prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-800-715-9871. We encourage participants to pre-register for the conference call using the following link:
https://bit.ly/EFSC1Q2024EarningsCallRegistration. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. A recorded replay of the conference call will be available on the website after the call’s completion. The replay will be available for at least two weeks following the conference call.
About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $14.6 billion in assets, is a financial holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly-owned subsidiary of EFSC, operates branch offices in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico, and SBA loan and deposit production offices throughout the country. Enterprise Bank & Trust offers a range of business and personal banking services and wealth management services. Enterprise Trust, a division of Enterprise Bank & Trust, provides financial planning, estate planning, investment management and trust services to businesses, individuals, institutions, retirement plans and non-profit organizations. Additional information is available at www.enterprisebank.com.
Enterprise Financial Services Corp’s common stock is traded on the Nasdaq Stock Market under the symbol “EFSC.” Please visit our website at www.enterprisebank.com to see our regularly posted material information.
Forward-looking Statements
Readers should note that, in addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, liquidity, yields and returns, loan diversification and credit management, shareholder value creation and the impact of acquisitions.
Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma”, “pipeline” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government
measures to address higher inflation), U.S. fiscal debt, budget and tax matters, and any slowdown in global economic growth, risks associated with rapid increases or decreases in prevailing interest rates, our ability to attract and retain deposits and access to other sources of liquidity, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, changes in the method of determining LIBOR and the phase out of LIBOR, natural disasters, terrorist activities, war and geopolitical matters (including the war in Israel and potential for a broader regional conflict and the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity, and those factors and risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.
For any forward-looking statements made in this press release or in any documents, EFSC claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Readers are cautioned not to place undue reliance on any forward-looking statements. Except to the extent required by applicable law or regulation, EFSC disclaims any obligation to revise or publicly release any revision or update to any of the forward-looking statements included herein to reflect events or circumstances that occur after the date on which such statements were made.
For more information contact
Investor Relations: Keene Turner, Senior Executive Vice President and CFO (314) 512-7233
Media: Steve Richardson, Senior Vice President, Corporate Communications (314) 995-5695
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except per share data) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| EARNINGS SUMMARY | |||||||||||||||
| Net interest income | $ | 137,728 | $ | 140,732 | $ | 141,639 | $ | 140,692 | $ | 139,529 | |||||
| Provision for credit losses | 5,756 | 18,053 | 8,030 | 6,339 | 4,183 | ||||||||||
| Noninterest income | 12,158 | 25,452 | 12,085 | 14,290 | 16,898 | ||||||||||
| Noninterest expense | 93,501 | 92,603 | 88,644 | 85,956 | 80,983 | ||||||||||
| Income before income tax expense | 50,629 | 55,528 | 57,050 | 62,687 | 71,261 | ||||||||||
| Income tax expense | 10,228 | 10,999 | 12,385 | 13,560 | 15,523 | ||||||||||
| Net income | 40,401 | 44,529 | 44,665 | 49,127 | 55,738 | ||||||||||
| Preferred stock dividends | 938 | 937 | 938 | 937 | 938 | ||||||||||
| Net income available to common shareholders | $ | 39,463 | $ | 43,592 | $ | 43,727 | $ | 48,190 | $ | 54,800 | |||||
| Diluted earnings per common share | $ | 1.05 | $ | 1.16 | $ | 1.17 | $ | 1.29 | $ | 1.46 | |||||
| Adjusted diluted earnings per common share1 | $ | 1.07 | $ | 1.21 | $ | 1.17 | $ | 1.29 | $ | 1.46 | |||||
| Return on average assets | 1.12 | % | 1.23 | % | 1.26 | % | 1.44 | % | 1.72 | % | |||||
| Adjusted return on average assets1 | 1.14 | % | 1.28 | % | 1.26 | % | 1.44 | % | 1.72 | % | |||||
| Return on average common equity1 | 9.52 | % | 10.94 | % | 11.00 | % | 12.48 | % | 14.85 | % | |||||
| Adjusted return on average common equity1 | 9.70 | % | 11.40 | % | 11.00 | % | 12.48 | % | 14.85 | % | |||||
| ROATCE1 | 12.31 | % | 14.38 | % | 14.49 | % | 16.53 | % | 19.93 | % | |||||
| Adjusted ROATCE1 | 12.53 | % | 14.98 | % | 14.49 | % | 16.53 | % | 19.93 | % | |||||
| Net interest margin (tax equivalent) | 4.13 | % | 4.23 | % | 4.33 | % | 4.49 | % | 4.71 | % | |||||
| Efficiency ratio | 62.38 | % | 55.72 | % | 57.66 | % | 55.46 | % | 51.77 | % | |||||
| Core efficiency ratio1 | 60.21 | % | 53.06 | % | 56.18 | % | 54.04 | % | 50.47 | % | |||||
| Assets | $ | 14,613,338 | $ | 14,518,590 | $ | 14,025,042 | $ | 13,871,154 | $ | 13,325,982 | |||||
| Average assets | $ | 14,556,119 | $ | 14,332,804 | $ | 14,068,860 | $ | 13,671,985 | $ | 13,131,195 | |||||
| Period end common shares outstanding | 37,515 | 37,416 | 37,385 | 37,359 | 37,311 | ||||||||||
| Dividends per common share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | |||||
| Tangible book value per common share1 | $ | 34.21 | $ | 33.85 | $ | 31.06 | $ | 31.23 | $ | 30.55 | |||||
| Tangible common equity to tangible assets1 | 9.01 | % | 8.96 | % | 8.51 | % | 8.65 | % | 8.81 | % | |||||
| Total risk-based capital to risk-weighted assets2 | 14.3 | % | 14.2 | % | 14.1 | % | 14.1 | % | 14.3 | % | |||||
| 1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP. | |||||||||||||||
| 2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review. |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| Quarter ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except per share data) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | |||||
| INCOME STATEMENTS | ||||||||||
| NET INTEREST INCOME | ||||||||||
| Interest income | $ | 207,723 | $ | 207,083 | $ | 200,906 | $ | 187,897 | $ | 169,033 |
| Interest expense | 69,995 | 66,351 | 59,267 | 47,205 | 29,504 | |||||
| Net interest income | 137,728 | 140,732 | 141,639 | 140,692 | 139,529 | |||||
| Provision for credit losses | 5,756 | 18,053 | 8,030 | 6,339 | 4,183 | |||||
| Net interest income after provision for credit losses | 131,972 | 122,679 | 133,609 | 134,353 | 135,346 | |||||
| NONINTEREST INCOME | ||||||||||
| Deposit service charges | 4,423 | 4,334 | 4,187 | 3,910 | 4,128 | |||||
| Wealth management revenue | 2,544 | 2,428 | 2,614 | 2,472 | 2,516 | |||||
| Card services revenue | 2,412 | 2,666 | 2,560 | 2,464 | 2,338 | |||||
| Tax credit income (loss) | (2,190) | 9,688 | (2,673) | 368 | 1,813 | |||||
| Other income | 4,969 | 6,336 | 5,397 | 5,076 | 6,103 | |||||
| Total noninterest income | 12,158 | 25,452 | 12,085 | 14,290 | 16,898 | |||||
| NONINTEREST EXPENSE | ||||||||||
| Employee compensation and benefits | 45,262 | 39,651 | 40,771 | 41,641 | 42,503 | |||||
| Deposit costs | 20,277 | 21,606 | 20,987 | 16,980 | 12,720 | |||||
| Occupancy | 4,326 | 4,313 | 4,198 | 3,954 | 4,061 | |||||
| FDIC special assessment | 625 | 2,412 | — | — | — | |||||
| Core conversion expense | 350 | — | — | — | — | |||||
| Other expense | 22,661 | 24,621 | 22,688 | 23,381 | 21,699 | |||||
| Total noninterest expense | 93,501 | 92,603 | 88,644 | 85,956 | 80,983 | |||||
| Income before income tax expense | 50,629 | 55,528 | 57,050 | 62,687 | 71,261 | |||||
| Income tax expense | 10,228 | 10,999 | 12,385 | 13,560 | 15,523 | |||||
| Net income | $ | 40,401 | $ | 44,529 | $ | 44,665 | $ | 49,127 | $ | 55,738 |
| Preferred stock dividends | 938 | 937 | 938 | 937 | 938 | |||||
| Net income available to common shareholders | $ | 39,463 | $ | 43,592 | $ | 43,727 | $ | 48,190 | $ | 54,800 |
| Basic earnings per common share | $ | 1.05 | $ | 1.16 | $ | 1.17 | $ | 1.29 | $ | 1.47 |
| Diluted earnings per common share | $ | 1.05 | $ | 1.16 | $ | 1.17 | $ | 1.29 | $ | 1.46 |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| At | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | |||||
| BALANCE SHEET | ||||||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ | 157,697 | $ | 193,275 | $ | 190,806 | $ | 202,702 | $ | 210,813 |
| Interest-earning deposits | 215,951 | 243,610 | 184,245 | 125,328 | 81,241 | |||||
| Debt and equity investments | 2,443,977 | 2,434,902 | 2,279,578 | 2,340,821 | 2,338,746 | |||||
| Loans held for sale | 610 | 359 | 212 | 551 | 261 | |||||
| Loans | 11,028,492 | 10,884,118 | 10,616,820 | 10,512,623 | 10,011,918 | |||||
| Allowance for credit losses | (135,498) | (134,771) | (142,133) | (141,319) | (138,295) | |||||
| Total loans, net | 10,892,994 | 10,749,347 | 10,474,687 | 10,371,304 | 9,873,623 | |||||
| Fixed assets, net | 44,382 | 42,681 | 41,268 | 41,988 | 42,340 | |||||
| Goodwill | 365,164 | 365,164 | 365,164 | 365,164 | 365,164 | |||||
| Intangible assets, net | 11,271 | 12,318 | 13,425 | 14,544 | 15,680 | |||||
| Other assets | 481,292 | 476,934 | 475,657 | 408,752 | 398,114 | |||||
| Total assets | $ | 14,613,338 | $ | 14,518,590 | $ | 14,025,042 | $ | 13,871,154 | $ | 13,325,982 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Noninterest-bearing deposits | $ | 3,805,334 | $ | 3,958,743 | $ | 3,852,486 | $ | 3,880,561 | $ | 4,192,523 |
| Interest-bearing deposits | 8,448,367 | 8,217,628 | 8,057,421 | 7,739,299 | 6,962,113 | |||||
| Total deposits | 12,253,701 | 12,176,371 | 11,909,907 | 11,619,860 | 11,154,636 | |||||
| Subordinated debentures and notes | 156,124 | 155,984 | 155,844 | 155,706 | 155,569 | |||||
| FHLB advances | 125,000 | — | — | 150,000 | 100,000 | |||||
| Other borrowings | 195,246 | 297,829 | 182,372 | 199,390 | 213,489 | |||||
| Other liabilities | 151,542 | 172,338 | 165,039 | 127,965 | 109,468 | |||||
| Total liabilities | 12,881,613 | 12,802,522 | 12,413,162 | 12,252,921 | 11,733,162 | |||||
| Shareholders’ equity: | ||||||||||
| Preferred stock | 71,988 | 71,988 | 71,988 | 71,988 | 71,988 | |||||
| Common stock | 375 | 374 | 374 | 374 | 373 | |||||
| Additional paid-in capital | 995,969 | 995,208 | 992,044 | 988,355 | 984,281 | |||||
| Retained earnings | 778,784 | 749,513 | 715,303 | 680,981 | 642,153 | |||||
| Accumulated other comprehensive loss | (115,391) | (101,015) | (167,829) | (123,465) | (105,975) | |||||
| Total shareholders’ equity | 1,731,725 | 1,716,068 | 1,611,880 | 1,618,233 | 1,592,820 | |||||
| Total liabilities and shareholders’ equity | $ | 14,613,338 | $ | 14,518,590 | $ | 14,025,042 | $ | 13,871,154 | $ | 13,325,982 |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| At or for the quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| LOAN PORTFOLIO | |||||||||||||||
| Commercial and industrial | $ | 4,766,310 | $ | 4,672,559 | $ | 4,448,535 | $ | 4,360,862 | $ | 4,032,189 | |||||
| Commercial real estate | 4,804,803 | 4,803,571 | 4,794,355 | 4,802,293 | 4,699,302 | ||||||||||
| Construction real estate | 820,416 | 760,425 | 723,796 | 671,573 | 663,264 | ||||||||||
| Residential real estate | 367,218 | 372,188 | 376,120 | 368,867 | 364,059 | ||||||||||
| Other | 269,745 | 275,375 | 274,014 | 309,028 | 253,104 | ||||||||||
| Total loans | $ | 11,028,492 | $ | 10,884,118 | $ | 10,616,820 | $ | 10,512,623 | $ | 10,011,918 | |||||
| DEPOSIT PORTFOLIO | |||||||||||||||
| Noninterest-bearing demand accounts | $ | 3,805,334 | $ | 3,958,743 | $ | 3,852,486 | $ | 3,880,561 | $ | 4,192,523 | |||||
| Interest-bearing demand accounts | 2,956,282 | 2,950,259 | 2,749,598 | 2,629,339 | 2,395,901 | ||||||||||
| Money market and savings accounts | 4,006,702 | 3,994,455 | 3,837,145 | 3,577,856 | 3,672,539 | ||||||||||
| Brokered certificates of deposit | 659,005 | 482,759 | 695,551 | 893,808 | 369,505 | ||||||||||
| Other certificates of deposit | 826,378 | 790,155 | 775,127 | 638,296 | 524,168 | ||||||||||
| Total deposits | $ | 12,253,701 | $ | 12,176,371 | $ | 11,909,907 | $ | 11,619,860 | $ | 11,154,636 | |||||
| AVERAGE BALANCES | |||||||||||||||
| Loans | $ | 10,927,932 | $ | 10,685,961 | $ | 10,521,966 | $ | 10,284,873 | $ | 9,795,045 | |||||
| Securities | 2,400,571 | 2,276,915 | 2,302,850 | 2,297,995 | 2,288,451 | ||||||||||
| Interest-earning assets | 13,596,571 | 13,383,638 | 13,160,587 | 12,756,653 | 12,189,750 | ||||||||||
| Assets | 14,556,119 | 14,332,804 | 14,068,860 | 13,671,985 | 13,131,195 | ||||||||||
| Deposits | 12,180,703 | 12,163,346 | 11,922,534 | 11,387,813 | 10,913,489 | ||||||||||
| Shareholders’ equity | 1,738,698 | 1,652,882 | 1,648,605 | 1,621,337 | 1,568,451 | ||||||||||
| Tangible common equity1 | 1,289,776 | 1,202,872 | 1,197,486 | 1,169,091 | 1,115,052 | ||||||||||
| YIELDS (tax equivalent) | |||||||||||||||
| Loans | 6.87 | % | 6.87 | % | 6.80 | % | 6.64 | % | 6.33 | % | |||||
| Securities | 3.27 | 3.20 | 3.11 | 3.06 | 3.03 | ||||||||||
| Interest-earning assets | 6.20 | 6.20 | 6.12 | 5.97 | 5.69 | ||||||||||
| Interest-bearing deposits | 3.14 | 3.03 | 2.77 | 2.26 | 1.56 | ||||||||||
| Deposits | 2.13 | 2.03 | 1.84 | 1.46 | 0.92 | ||||||||||
| Subordinated debentures and notes | 6.40 | 6.30 | 6.28 | 6.27 | 6.28 | ||||||||||
| FHLB advances and other borrowed funds | 3.80 | 3.06 | 2.76 | 3.45 | 2.60 | ||||||||||
| Interest-bearing liabilities | 3.22 | 3.09 | 2.84 | 2.40 | 1.72 | ||||||||||
| Net interest margin | 4.13 | 4.23 | 4.33 | 4.49 | 4.71 |
1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP.
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| ASSET QUALITY | |||||||||||||||
| Net charge-offs (recoveries) | $ | 5,864 | $ | 28,479 | $ | 6,856 | $ | 2,973 | $ | (264) | |||||
| Nonperforming loans | 35,642 | 43,728 | 48,932 | 16,112 | 11,972 | ||||||||||
| Classified assets | 185,150 | 185,389 | 184,393 | 108,065 | 110,384 | ||||||||||
| Nonperforming loans to total loans | 0.32 | % | 0.40 | % | 0.46 | % | 0.15 | % | 0.12 | % | |||||
| Nonperforming assets to total assets | 0.30 | % | 0.34 | % | 0.40 | % | 0.12 | % | 0.09 | % | |||||
| Allowance for credit losses to total loans | 1.23 | % | 1.24 | % | 1.34 | % | 1.34 | % | 1.38 | % | |||||
| Allowance for credit losses to total loans, excluding guaranteed loans | 1.34 | % | 1.35 | % | 1.47 | % | 1.48 | % | 1.53 | % | |||||
| Allowance for credit losses to nonperforming loans | 380.2 | % | 308.2 | % | 290.5 | % | 877.1 | % | 1,155.2 | % | |||||
| Net charge-offs (recoveries) to average loans -annualized | 0.22 | % | 1.06 | % | 0.26 | % | 0.12 | % | (0.01) | % | |||||
| WEALTH MANAGEMENT | |||||||||||||||
| Trust assets under management | $ | 2,352,902 | $ | 2,235,073 | $ | 2,129,408 | $ | 1,992,563 | $ | 1,956,146 | |||||
| SHARE DATA | |||||||||||||||
| Book value per common share | $ | 44.24 | $ | 43.94 | $ | 41.19 | $ | 41.39 | $ | 40.76 | |||||
| Tangible book value per common share1 | $ | 34.21 | $ | 33.85 | $ | 31.06 | $ | 31.23 | $ | 30.55 | |||||
| Market value per share | $ | 40.56 | $ | 44.65 | $ | 37.50 | $ | 39.10 | $ | 44.59 | |||||
| Period end common shares outstanding | 37,515 | 37,416 | 37,385 | 37,359 | 37,311 | ||||||||||
| Average basic common shares | 37,490 | 37,421 | 37,405 | 37,347 | 37,305 | ||||||||||
| Average diluted common shares | 37,597 | 37,554 | 37,520 | 37,495 | 37,487 | ||||||||||
| CAPITAL | |||||||||||||||
| Total risk-based capital to risk-weighted assets2 | 14.3 | % | 14.2 | % | 14.1 | % | 14.1 | % | 14.3 | % | |||||
| Tier 1 capital to risk-weighted assets2 | 12.8 | % | 12.7 | % | 12.6 | % | 12.5 | % | 12.6 | % | |||||
| Common equity tier 1 capital to risk-weighted assets2 | 11.4 | % | 11.3 | % | 11.2 | % | 11.1 | % | 11.2 | % | |||||
| Tangible common equity to tangible assets1 | 9.01 | % | 8.96 | % | 8.51 | % | 8.65 | % | 8.81 | % | |||||
| 1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP. | |||||||||||||||
| 2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review. |
ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
| Quarter ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| CORE EFFICIENCY RATIO | |||||||||||||||
| Net interest income (GAAP) | $ | 137,728 | $ | 140,732 | $ | 141,639 | $ | 140,692 | $ | 139,529 | |||||
| Tax-equivalent adjustment | 2,040 | 1,915 | 2,061 | 2,062 | 2,041 | ||||||||||
| Noninterest income (GAAP) | 12,158 | 25,452 | 12,085 | 14,290 | 16,898 | ||||||||||
| Less gain on sale of investment securities | — | 220 | — | — | 381 | ||||||||||
| Less gain (loss) on sale of other real estate owned | (2) | — | — | 97 | 90 | ||||||||||
| Core revenue (non-GAAP) | 151,928 | 167,879 | 155,785 | 156,947 | 157,997 | ||||||||||
| Noninterest expense (GAAP) | 93,501 | 92,603 | 88,644 | 85,956 | 80,983 | ||||||||||
| Less FDIC special assessment | 625 | 2,412 | — | — | — | ||||||||||
| Less core conversion expense | 350 | — | — | — | — | ||||||||||
| Less amortization on intangibles | 1,047 | 1,108 | 1,118 | 1,136 | 1,239 | ||||||||||
| Core noninterest expense (non-GAAP) | 91,479 | 89,083 | 87,526 | 84,820 | 79,744 | ||||||||||
| Core efficiency ratio (non-GAAP) | 60.21 | % | 53.06 | % | 56.18 | % | 54.04 | % | 50.47 | % | |||||
| Quarter ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands, except per share data) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| TANGIBLE COMMON EQUITY, TANGIBLE BOOK VALUE PER SHARE AND TANGIBLE COMMON EQUITY RATIO | |||||||||||||||
| Shareholders’ equity (GAAP) | $ | 1,731,725 | $ | 1,716,068 | $ | 1,611,880 | $ | 1,618,233 | $ | 1,592,820 | |||||
| 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 | 11,271 | 12,318 | 13,425 | 14,544 | 15,680 | ||||||||||
| Tangible common equity (non-GAAP) | $ | 1,283,302 | $ | 1,266,598 | $ | 1,161,303 | $ | 1,166,537 | $ | 1,139,988 | |||||
| Less net unrealized losses on HTM securities, after tax | 47,822 | 41,038 | 81,367 | 53,611 | 48,630 | ||||||||||
| Tangible common equity adjusted for unrealized losses on HTM securities (non-GAAP) | $ | 1,235,480 | $ | 1,225,560 | $ | 1,079,936 | $ | 1,112,926 | $ | 1,091,358 | |||||
| Common shares outstanding | 37,515 | 37,416 | 37,385 | 37,359 | 37,311 | ||||||||||
| Tangible book value per share (non-GAAP) | $ | 34.21 | $ | 33.85 | $ | 31.06 | $ | 31.23 | $ | 30.55 | |||||
| Total assets (GAAP) | $ | 14,613,338 | $ | 14,518,590 | $ | 14,025,042 | $ | 13,871,154 | $ | 13,325,982 | |||||
| Less goodwill | 365,164 | 365,164 | 365,164 | 365,164 | 365,164 | ||||||||||
| Less intangible assets | 11,271 | 12,318 | 13,425 | 14,544 | 15,680 | ||||||||||
| Tangible assets (non-GAAP) | $ | 14,236,903 | $ | 14,141,108 | $ | 13,646,453 | $ | 13,491,446 | $ | 12,945,138 | |||||
| Tangible common equity to tangible assets (non-GAAP) | 9.01 | % | 8.96 | % | 8.51 | % | 8.65 | % | 8.81 | % | |||||
| Tangible common equity to tangible assets adjusted for unrealized losses on HTM securities (non-GAAP) | 8.68 | % | 8.67 | % | 7.91 | % | 8.25 | % | 8.43 | % | |||||
| Quarter Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) | |||||||||||||||
| Average shareholder’s equity (GAAP) | $ | 1,738,698 | $ | 1,652,882 | $ | 1,648,605 | $ | 1,621,337 | $ | 1,568,451 | |||||
| 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 | 11,770 | 12,858 | 13,967 | 15,094 | 16,247 | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,289,776 | $ | 1,202,872 | $ | 1,197,486 | $ | 1,169,091 | $ | 1,115,052 | |||||
| Net income available to common shareholders (GAAP) | $ | 39,463 | $ | 43,592 | $ | 43,727 | $ | 48,190 | $ | 54,800 | |||||
| FDIC special assessment (after tax) | 470 | 1,814 | — | — | — | ||||||||||
| Core conversion expense (after tax) | 263 | — | — | — | — | ||||||||||
| Net income available to common shareholders adjusted (non-GAAP) | $ | 40,196 | $ | 45,406 | $ | 43,727 | $ | 48,190 | $ | 54,800 | |||||
| Return on average common equity (non-GAAP) | 9.52 | % | 10.94 | % | 11.00 | % | 12.48 | % | 14.85 | % | |||||
| Adjusted return on average common equity (non-GAAP) | 9.70 | % | 11.40 | % | 11.00 | % | 12.48 | % | 14.85 | % | |||||
| ROATCE (non-GAAP) | 12.31 | % | 14.38 | % | 14.49 | % | 16.53 | % | 19.93 | % | |||||
| Adjusted ROATCE (non-GAAP) | 12.53 | % | 14.98 | % | 14.49 | % | 16.53 | % | 19.93 | % | |||||
| Quarter ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| CALCULATION OF PRE-PROVISION NET REVENUE (PPNR) | |||||||||||||||
| Net interest income | $ | 137,728 | $ | 140,732 | $ | 141,639 | $ | 140,692 | $ | 139,529 | |||||
| Noninterest income | 12,158 | 25,452 | 12,085 | 14,290 | 16,898 | ||||||||||
| FDIC special assessment | 625 | 2,412 | — | — | — | ||||||||||
| Core conversion expense | 350 | — | — | — | — | ||||||||||
| Less gain on sale of investment securities | — | 220 | — | — | 381 | ||||||||||
| Less gain (loss) on sale of other real estate owned | (2) | — | — | 97 | 90 | ||||||||||
| Less noninterest expense | 93,501 | 92,603 | 88,644 | 85,956 | 80,983 | ||||||||||
| PPNR (non-GAAP) | $ | 57,362 | $ | 75,773 | $ | 65,080 | $ | 68,929 | $ | 74,973 | |||||
| Quarter ended | |||||||||||||||
| --- | --- | --- | --- | --- | |||||||||||
| ($ in thousands) | Mar 31,<br>2024 | Dec 31,<br>2023 | |||||||||||||
| CALCULATION OF ESTIMATED INSURED DEPOSITS | |||||||||||||||
| Estimated uninsured deposits per Call Report | $ | 4,062,505 | $ | 4,297,447 | |||||||||||
| Collateralized/affiliate deposits | (515,439) | (459,872) | |||||||||||||
| Accrued interest on deposits | (5,542) | (7,291) | |||||||||||||
| Adjusted uninsured/uncollateralized deposits | 3,541,524 | 3,830,284 | |||||||||||||
| Estimated insured/collateralized deposits | 8,712,177 | 8,346,087 | |||||||||||||
| Total deposits | $ | 12,253,701 | $ | 12,176,371 | |||||||||||
| Quarter ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands, except per share data) | Mar 31,<br>2024 | Dec 31,<br>2023 | Sep 30,<br>2023 | Jun 30,<br>2023 | Mar 31,<br>2023 | ||||||||||
| RETURN ON AVERAGE ASSETS AND DILUTED EARNINGS PER SHARE | |||||||||||||||
| Net income (GAAP) | $ | 40,401 | $ | 44,529 | $ | 44,665 | $ | 49,127 | $ | 55,738 | |||||
| FDIC special assessment (after tax) | 470 | 1,814 | — | — | — | ||||||||||
| Core conversion expense (after tax) | 263 | — | — | — | — | ||||||||||
| Net income adjusted (non-GAAP) | $ | 41,134 | $ | 46,343 | $ | 44,665 | $ | 49,127 | $ | 55,738 | |||||
| Less preferred stock dividends | 938 | 937 | 938 | 937 | 938 | ||||||||||
| Net income available to common shareholders adjusted (non-GAAP) | $ | 40,196 | $ | 45,406 | $ | 43,727 | $ | 48,190 | $ | 54,800 | |||||
| Average assets | $ | 14,556,119 | $ | 14,332,804 | $ | 14,068,860 | $ | 13,671,985 | $ | 13,131,195 | |||||
| Return on average assets (GAAP) | 1.12 | % | 1.23 | % | 1.26 | % | 1.44 | % | 1.72 | % | |||||
| Adjusted return on average assets (non-GAAP) | 1.14 | % | 1.28 | % | 1.26 | % | 1.44 | % | 1.72 | % | |||||
| Average diluted common shares | 37,597 | 37,554 | 37,520 | 37,495 | 37,487 | ||||||||||
| Adjusted diluted earnings per share (non-GAAP) | $ | 1.07 | $ | 1.21 | $ | 1.17 | $ | 1.29 | $ | 1.46 |
20
q12024efscearningsreleas
Enterprise Financial Services Corp 2024 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,” “pipeline” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: our ability to efficiently integrate acquisitions into our operations, retain the customers of these businesses and grow the acquired operations; credit risk; changes in the appraised valuation of real estate securing impaired loans; our ability to recover our investment in loans; fluctuations in the fair value of collateral underlying loans; outcomes of litigation and other contingencies; exposure to general and local economic and market conditions, including risk of recession, 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; changes in business prospects that could impact goodwill estimates and assumptions; consolidation within the banking industry; competition from banks and other financial institutions; the 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 business, including rules and regulations relating to bank products and financial services; changes in accounting policies and practices or accounting standards; natural disasters; terrorist activities, war and geopolitical matters (including the war in Israel and potential for a broader regional conflict and the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, or other health emergencies and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity; and other risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results. For any forward-looking statements made in this press release or in any documents, EFSC claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 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 - 1Q24* Capital • Tangible Common Equity/Tangible Assets** 9.01%, compared to 8.96% • Tangible Book Value Per Common Share** $34.21, compared to $33.85 • CET1 Ratio 11.4%, compared to 11.3% • Quarterly common stock dividend of $0.25 per share in first quarter 2024 • Quarterly preferred stock dividend of $12.50 per share ($0.3125 per depositary share) • Net Income $40.4 million, down $4.1 million; EPS $1.05 • Net Interest Income $137.7 million, down $3.0 million; NIM 4.13% • PPNR** $57.4 million, down $18.4 million • Adjusted ROAA** 1.14%, compared to 1.28%; PPNR ROAA** 1.58%, compared to 2.10% • Adjusted ROATCE** 12.53%, compared to 14.98% 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 - 1Q24* *Comparisons noted below are to the linked quarter unless otherwise noted. **A Non-GAAP Measure, Refer to Appendix for Reconciliation. Loans & Deposits • Loans $11.0 billion, up $144.4 million • Loan/Deposit Ratio 90% • Deposits $12.3 billion, up $77.3 million • Noninterest-bearing Deposits/Total Deposits 31% Asset Quality • Nonperforming Loans/Loans 0.32% • Nonperforming Assets/Assets 0.30% • Allowance Coverage Ratio 1.23%; 1.34% adjusted for guaranteed loans** • Net Charge-offs $5.9 million 4
Areas of Focus Organic Loan and Deposit Growth • Continue Funding Loan Growth with Customer Deposits • Build Franchise Value by Expanding Existing and Acquiring New Relationships Disciplined Loan and Deposit Pricing Focused Credit Underwriting and Monitoring Focus on Long-term Earnings Trajectory Core System Conversion 5
$10,012 $10,513 $10,617 $10,884 $11,028 1Q23 2Q23 3Q23 4Q23 1Q24 In Millions 10% Total Loan Grow th Loan Trends 6
Loan Details 1Q24 4Q23 1Q23 Qtr Change LTM Change C&I $ 2,264 $ 2,186 $ 2,006 $ 78 $ 258 CRE Investor Owned 2,281 2,292 2,240 (11) 41 CRE Owner Occupied 1,280 1,262 1,174 18 106 SBA loans* 1,275 1,282 1,316 (7) (41) Sponsor Finance* 865 872 678 (7) 187 Life Insurance Premium Financing* 1,004 956 860 48 144 Tax Credits* 718 735 547 (17) 171 Residential Real Estate 354 360 349 (6) 5 Construction and Land Development 727 670 590 57 137 Other 260 269 252 (9) 8 Total Loans $ 11,028 $ 10,884 $ 10,012 $ 144 $ 1,016 *Specialty loan category. In Millions 7
Loans By Region Specialty Lending $3,503 $3,898 $3,918 1Q23 4Q23 1Q24 In Millions Midwest $3,267 $3,338 $3,412 1Q23 4Q23 1Q24 Southwest $1,327 $1,566 $1,605 1Q23 4Q23 1Q24 Note: Excludes “Other” loans; Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), West (Southern California) West $1,663 $1,813 $1,833 1Q23 4Q23 1Q24 8
Deposit Details 1Q24 4Q23 1Q23 Qtr Change LTM Change Noninterest-bearing demand accounts $ 3,805 $ 3,959 $ 4,192 $ (154) $ (387) Interest-bearing demand accounts 2,956 2,950 2,396 6 560 Money market accounts 3,431 3,399 2,960 32 471 Savings accounts 576 595 713 (19) (137) Certificates of deposit: Brokered 659 483 370 176 289 Customer 827 790 524 37 303 Total Deposits $ 12,254 $ 12,176 $ 11,155 $ 78 $ 1,099 Specialty Deposits (included in total deposits)** $ 2,901 $ 2,778 $ 2,431 $ 123 $ 470 In Millions * Total deposits excluding specialty and brokered CDs decreased $221 million from 4Q23 and increased $340 million from 1Q23 ** Note: 1Q23 amounts have been reclassified among categories to conform to the current period presentation. Deposits related to specialty lending (i.e., Sponsor Finance and Life Insurance Premium Finance) are no longer included in Specialty deposits. * 9
Deposits By Region Specialty Deposits** $2,431 $2,778 $2,901 1Q23 4Q23 1Q24 In Millions Midwest(*)** $5,472 $6,219 $6,206 1Q23 4Q23 1Q24 Southwest $1,835 $1,828 $1,886 1Q23 4Q23 1Q24 West* $1,417 $1,351 $1,261 1Q23 4Q23 1Q24 Note: Region Components: Midwest (St. Louis & Kansas City), Southwest (AZ, NM, Las Vegas, TX), West (Southern California) *Includes brokered balances ** Note, prior period amounts have been reclassified among categories to conform to the current period presentation. Deposits related to specialty lending (i.e., Sponsor Finance and Life Insurance Premium Finance) are no longer included in Specialty deposits. 10
Specialty Deposits 40.3% 33.5% 26.2% Community Associations $1.2 billion in deposit accounts specifically designed to serve the needs of community associations. Property Management $972 million in deposits. Specializing in the compliance of Property Management Trust Accounts. Third Party Escrow and Trust Services $761 million in deposits. Product lines providing services to independent escrow and non- depository trust companies. • $2.90 billion - Specialty deposits, representing 24% of total deposits • $2.96 billion - Average specialty deposits for 1Q24 • $20.3 million - Related deposit costs in noninterest expense, resulting in an average specialty deposit cost of 2.73% • $126.7 million - Average Deposits per Branch for FDIC Insured Banks with a deposit portfolio between $5-20B* • 25 - Number of traditional branches that would support the EFSC specialty deposit portfolio *Data Source: Deposit data as of June 30th, 2023, per the FDIC Summary of Deposits. 1Q23 2Q23 3Q23 4Q23 1Q24 Community Assoc Property Mgmt Third-Party Escrow and Trust Services $— $500 $1,000 In Millions 11
Core Funding Mix Commercial Business Banking Consumer In Millions $2,769$1,358$4,315 1At March 31, 2024 2Excludes insured accounts, collateralized accounts, accounts that qualify for pass-through insurance, reciprocal accounts, and affiliated accounts. Note: Brokered deposits were $0.9 billion at 1Q24 Specialty $2,901 1Q24 Net New/Closed Deposit Accounts COMMERCIAL BUSINESS BANKING CONSUMER SPECIALTY Total net average balance ($ in thousands) 1Q24 $ 81,742 $ 16,921 $ 3,986 $ 142,484 4Q23 $ 85,358 $ 18,529 $ 26,556 $ 214,189 3Q23 $ 51,792 $ 35,842 $ 27,182 $ 228,800 2Q23 $ 52,313 $ 15,031 $ 687 $ 161,683 Number of accounts 1Q24 (48) 31 759 2,260 4Q23 84 (77) 842 1,452 3Q23 96 (23) 996 1,229 2Q23 (54) (110) 482 1,792 Total Portfolio Average Account Size & Cost of Funds Average account size ($ in thousands) 1Q24 $ 273 $ 69 $ 24 $ 120 Cost of funds 1Q241 2.53 % 1.42 % 1.60 % 1.25 % • Estimated uninsured deposits of $3.5 billion, or 29% 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 • ~156% of on- and off-balance sheet liquidity to estimated uninsured deposits Overview 32% 34% 31% 41% 32% 19% 3% 7% 32% 20% 18% 22% 1% 56% 7% 36% 12
Earnings Per Share Trend - 1Q24 $1.16 $(0.34) $0.26 $(0.02) $(0.01) $1.05 4Q23 Operating Revenue Provision for Credit Losses Noninterest Expense Change in Effective Tax Rate 1Q24 Change in EPS 13
$139.5 $140.7 $141.6 $140.7 $137.7 4.71% 4.49% 4.33% 4.23% 4.13% 4.52% 4.99% 5.26% 5.33% 5.33% Net Interest Income Net Interest Margin Avg Fed Funds Rate 1Q23 2Q23 3Q23 4Q23 1Q24 Net Interest Income Trend In Millions Stable Net Interest Income 14
Net Interest Margin 6.33% 6.64% 6.80% 6.87% 6.87% 3.03% 3.06% 3.11% 3.20% 3.27% 5.69% 5.97% 6.12% 6.20% 6.20% Earning asset yield Securities yield Loan yield 1Q23 2Q23 3Q23 4Q23 1Q24 1.56% 2.26% 2.77% 3.03% 3.14% 0.92% 1.46% 1.84% 2.03% 2.13% 1.72% 2.40% 2.84% 3.09% 3.22% Interest-bearing deposit rate Total cost of deposits Interest-bearing liabilities 1Q23 2Q23 3Q23 4Q23 1Q24 Components of Interest-bearing LiabilitiesComponents of Interest-earning Assets 4.23% 0.05% (0.04)% (0.07)% (0.04)% 4.13% 4Q23 Loans Other Earning Asset Mix Funding Mix Cost of Funds 1Q24 Margin Bridge 15
(1) 12 26 106 22 1Q23 2Q23 3Q23 4Q23 1Q24 $275 $501 $104 $267 $144 42.4% 44.6% 41.0% 42.0% 44.4% Organic Loans Avg Line Draw % 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 4Q23 1Q23 NPLs/Loans 0.32 % 0.40 % 0.12 % NPAs/Assets 0.30 % 0.34 % 0.09 % ACL/NPLs 380.2 % 308.2 % 1155.2 % ACL/Loans** 1.34 % 1.35 % 1.53 % Annualized Net Charge-offs (Recoveries) to Average Loans Provision for Credit Losses* $4.2 $6.3 $8.0 $18.1 $5.8 1Q23 2Q23 3Q23 4Q23 1Q24 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. A Non-GAAP Measure, Refer to Appendix for Reconciliation. Credit Trends 16
$134.8 $6.6 $(5.9) $135.5 ACL 4Q23 Portfolio Changes Net Charge-offs ACL 1Q24 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 1Q24 In Millions Loans ACL ACL as a % of Loans Commercial and industrial $ 4,766 $ 59 1.24 % Commercial real estate 4,805 56 1.17 % Construction real estate 821 10 1.22 % Residential real estate 367 7 1.91 % Other 269 4 1.49 % Total $ 11,028 $ 136 1.23 % Reserves on sponsor finance, agricultural, and investor office CRE loans, which are included in the categories above, represented $22.7 million, $5.7 million, and $9.1 million, respectively. Total ACL percentage of loans excluding government guaranteed loans was 1.34%*. 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 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. 17
Noninterest Income Trend Other Noninterest Income DetailNoninterest Income In Millions $16.9 $14.3 $12.1 $25.5 $12.2 $6.1 $5.1 $5.4 $6.3 $5.0 $1.9 $0.4 $(2.7) $9.7 $(2.2) $4.1 $3.9 $4.2 $4.3 $4.4 $2.3 $2.4 $2.6 $2.7 $2.4 $2.5 $2.5 $2.6 $2.5 $2.6 10.8% 9.2% 7.9% 15.3% 8.1% Other Tax Credit Income Deposit Services Charge Card Services Wealth Management Noninterest income/Total income 1Q23 2Q23 3Q23 4Q23 1Q24 $6.1 $5.1 $5.4 $6.3 $5.0 $1.7 $1.2 $1.8 $2.3 $1.6 $0.5 $0.4 $0.7 $0.8 $0.3 $0.8 $0.8 $0.8 $1.3 $0.9 $0.3 $0.2 $0.1 $0.2 $0.6 $2.1 $0.3 $1.0 $0.6 $1.7 $0.4 $0.2 $0.7 $0.2 $0.5 $1.5 $1.4 Miscellaneous Servicing Fees BOLI Swap Fees CDE Private Equity Fund Distribution Gain on SBA loan sales 1Q23 2Q23 3Q23 4Q23 1Q24 18
Noninterest Expense Trend Other Noninterest Expense DetailNoninterest Expense In Millions $81.0 $86.0 $88.6 $92.6 $93.5 $21.7 $23.4 $22.7 $24.6 $23.0 $12.7 $17.0 $21.0 $21.6 $20.3 $2.4 $0.6 $4.1 $4.0 $4.2 $4.3 $4.3 $42.5 $41.6 $40.7 $39.7 $45.3 50.5% 54.0% 56.2% 53.1% 60.2% Other Deposit costs FDIC special assessment Occupancy Employee compensation and benefits Core efficiency ratio* 1Q23 2Q23 3Q23 4Q23 1Q24 $21.7 $23.4 $22.7 $24.6 $23.0 $10.7 $12.5 $11.4 $13.0 $11.2 $3.7 $3.7 $3.8 $4.0 $4.3 $1.6 $1.6 $1.4 $1.1 $1.4 $2.6 $2.6 $2.9 $2.7 $3.0 $1.9 $1.9 $2.1 $2.7 $2.1$1.2 $1.1 $1.1 $1.1 $1.0 Miscellaneous Data processing Professional fees FDIC and other insurance Loan, legal expenses Amortization expense 1Q23 2Q23 3Q23 4Q23 1Q24 19
Capital Tangible Common Equity/Tangible Assets 8.81% 8.65% 8.51% 8.96% 9.01% Tangible Common Equity/Tangible Assets* 1Q23 2Q23 3Q23 4Q23 1Q24 *A Non-GAAP Measure, Refer to Appendix for Reconciliation. **Preliminary regulatory capital ratios. Regulatory Capital 10.0% 14.3% 14.1% 14.1% 14.2% 14.3% 6.5% 11.2% 11.1% 11.2% 11.3% 11.4% CET1 Tier 1 Total Risk Based Capital Minimum "Well Capitalized" Ratio 1Q23 2Q23 3Q23 4Q23 1Q24 8.0% 12.6% 12.5% 12.6% 12.7% 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 $30.55 $31.23 $31.06 $33.85 $34.21 $0.25 $0.25 $0.25 $0.25 $0.25 TBV/Share* Dividends per Share 1Q23 2Q23 3Q23 4Q23 1Q24 12.8% ** 20
Appendix
Investment Portfolio Breakout AFS & HTM Securities Obligations of U.S. Government- sponsored enterprises 12% Obligations of states and political subdivisions 42% Agency mortgage- backed securities, 32% Corporate debt securities 6% U.S. Treasury bills 8% TOTAL $2.4 billion • Effective duration of 5.7 years balances the short 3-year duration of the loan portfolio • Cash flows next 12 months of approximately $341.1 million • 3.27% 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) 1Q23 2Q23 3Q23 4Q23 1Q24 $— $600 $1,200 $1,800 $(320) $(160) $— $160 In Millions $101.3 $74.6 $53.9 $144.6 $69.8 4.79% 5.07% 5.60% 5.36% 5.21% Principal Cost Yield (TEQ) 1Q23 2Q23 3Q23 4Q23 1Q24 Investment Purchase Yield In Millions Investment Portfolio 22
EFSC Borrowing Capacity $4.3 $4.4 $5.2 $0.9 $1.0 $1.3 $2.5 $2.5 $2.6 $0.1 $0.1 $0.1$0.8 $0.8 $1.1 36% 37% 42% FHLB borrowing capacity FRB borrowing capacity Fed Funds lines Unpledged securities Borrowing capacity/Deposits 3Q23 4Q23 1Q24 In Billions End of Period and Average Loans to Deposits 90% 91% 89% 89% 90%90% 90% 88% 88% 90% End of period Loans/Deposits Avg Loans/Avg Deposits 1Q23 2Q23 3Q23 4Q23 1Q24 • $1.3 billion available FHLB capacity • $2.6 billion available FRB capacity • $120.0 million in six federal funds lines • $1.1 billion unpledged investment securities • $369.4 million cash • $25.0 million available line of credit • Portfolio of saleable SBA loans • Investment portfolio/total assets of 16% • FHLB maximum credit capacity is 45% of assets $0.3 $0.3 $0.3 $0.2 $0.2 $0.3 $0.6 $0.9 $1.2 $1.4 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 Liquidity 23
Office CRE (Non-owner Occupied) Total $492.2 Million Midwest 48.9% Southwest 27.8% West 18.2% Specialty 5.1% Office CRE Loans by Location Real Estate/ Rental/Leasing 86.2% Health Care and Social Assistance 3.7% Other 10.1% Office CRE Loans by Industry Type Size Average Risk Rating Number of Loans Balance Average Balance > $10 Million 5.45 11 $ 161.5 $ 14.7 $5-10 Million 5.00 10 67.5 6.8 $2-5 Million 5.15 46 143.6 3.1 < $2 Million 5.19 211 119.6 0.6 Total 5.19 278 $ 492.2 $ 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%; average rents of $24 psf • 42% Class A, 54% Class B, 4% Class C • $11.6 million unfunded commitments • Limited near-term maturity risk: 7.3% to mature in 2024, 92.7% maturing in 2025 and beyond 24
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, ROAA, PPNR return on average assets (“PPNR ROAA”), allowance for coverage ratio adjusted for guaranteed loans, 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, ROAA, PPNR ROAA, allowance for coverage ratio adjusted for guaranteed loans, 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 the FDIC special assessment, 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. 25
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS Shareholders’ equity $ 1,731,725 $ 1,716,068 $ 1,611,880 $ 1,618,233 $ 1,592,820 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 11,271 12,318 13,425 14,544 15,680 Tangible common equity $ 1,283,302 $ 1,266,598 $ 1,161,303 $ 1,166,537 $ 1,139,988 Common shares outstanding 37,515 37,416 37,385 37,359 37,311 Tangible book value per share (non-GAAP) $ 34.21 $ 33.85 $ 31.06 $ 31.23 $ 30.55 Total assets $ 14,613,338 $ 14,518,590 $ 14,025,042 $ 13,871,154 $ 13,325,982 Less goodwill 365,164 365,164 $ 365,164 365,164 365,164 Less intangible assets 11,271 12,318 $ 13,425 14,544 15,680 Tangible assets (non-GAAP) $ 14,236,903 $ 14,141,108 $ 13,646,453 $ 13,491,446 $ 12,945,138 Tangible common equity to tangible assets (non-GAAP) 9.01 % 8.96 % 8.51 % 8.65 % 8.81 % Quarter ended ($ in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 RETURN ON AVERAGE ASSETS Net income $ 40,401 $ 44,529 $ 44,665 $ 49,127 $ 55,738 FDIC special assessment (after tax) 470 1,814 — — — Core conversion expense (after tax) 263 — — — — Net income adjusted (non-GAAP) $ 41,134 $ 46,343 $ 44,665 $ 49,127 $ 55,738 Average assets $ 14,556,119 $ 14,332,804 $ 14,068,860 $ 13,671,985 $ 13,131,195 ROAA 1.12 % 1.23 % 1.26 % 1.44 % 1.72 % Adjusted ROAA (non-GAAP) 1.14 % 1.28 % 1.26 % 1.44 % 1.72 % 26
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 CALCULATION OF PRE-PROVISION NET REVENUE Net interest income $ 137,728 $ 140,732 $ 141,639 $ 140,692 $ 139,529 Noninterest income 12,158 25,452 12,085 14,290 16,898 FDIC special assessment 625 2,412 — — — Core conversion expense 350 — — — — Less gain on sale of investment securities — 220 — — 381 Less gain (loss) on sale of other real estate owned (2) — — 97 90 Less noninterest expense 93,501 92,603 88,644 85,956 80,983 PPNR (non-GAAP) $ 57,362 $ 75,773 $ 65,080 $ 68,929 $ 74,973 Average assets $ 14,556,119 $ 14,332,804 $ 14,068,860 $ 13,671,985 $ 13,131,195 PPNR ROAA (non-GAAP) 1.58 % 2.10 % 1.84 % 2.02 % 2.32 % Quarter ended ($ in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE) Average shareholder’s equity $ 1,738,698 $ 1,652,882 $ 1,648,605 $ 1,621,337 $ 1,568,451 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 11,770 12,858 13,967 15,094 16,247 Average tangible common equity $ 1,289,776 $ 1,202,872 $ 1,197,486 $ 1,169,091 $ 1,115,052 Net income available to common shareholders (GAAP) $ 39,463 $ 43,592 $ 43,727 $ 48,190 $ 54,800 FDIC special assessment (after tax) 470 1,814 — — — Core conversion expense (after tax) 263 — — — — Net income available to common shareholders adjusted (non-GAAP) $ 40,196 $ 45,406 $ 43,727 $ 48,190 $ 54,800 ROATCE (non-GAAP) 12.31 % 14.38 % 14.49 % 16.53 % 19.93 % Adjusted ROATCE (non-GAAP) 12.53 % 14.98 % 14.49 % 16.53 % 19.93 % 27
Reconciliation of Non-GAAP Financial Measures Quarter ended ($ in thousands) March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 ALLOWANCE COVERAGE RATIO ADJUSTED FOR GUARANTEED LOANS Loans (GAAP) $ 11,028,492 $ 10,884,118 $ 10,616,820 $ 10,512,623 $ 10,011,918 Less PPP and other guaranteed loans, net 924,633 932,118 950,909 977,287 963,311 Adjusted loans (non-GAAP) $ 10,103,859 $ 9,952,000 $ 9,665,911 $ 9,535,336 $ 9,048,607 Allowance for credit losses $ 135,498 $ 134,771 $ 142,133 $ 141,319 $ 138,295 Allowance for credit losses/loans (GAAP) 1.23 % 1.24 % 1.34 % 1.34 % 1.38 % Allowance for credit losses/adjusted loans (non-GAAP) 1.34 % 1.35 % 1.47 % 1.48 % 1.53 % 28
