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Enterprise Financial Reports Third Quarter 2022 Results

Third Quarter Results

  • Net income of $50.2 million, $1.32 per diluted common share
  • Net interest income of $124.3 million, a quarterly increase of $14.7 million, or 13%
  • Net interest margin of 4.10%
  • Pre-provision return on average assets1 of 1.96%
  • Total loans2 of $9.3 billion, a quarterly increase of $122.0 million, or 5% annualized
  • Increased quarterly dividend $0.01 to $0.24 per common share for the fourth quarter

Jim Lally, President and Chief Executive Officer of Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”), said today upon the release of EFSC’s third quarter earnings, “Our results for the third quarter continued the momentum we established early in the year and reflects the strength of our diversified franchise. We grew loans, maintained liquidity, expanded net interest income, and reported near record earnings. We continue to be pleased with the credit quality of our loan portfolio and our solid capital position. We believe we are well positioned to finish the year with strong performance.”

Highlights

Comparisons to the prior year are impacted by the acquisition of First Choice Bancorp (“First Choice” or “FCBP”) in the third quarter of 2021.

  • Earnings - Net income in the third quarter 2022 was $50.2 million, an increase of $5.1 million compared to the linked quarter and an increase of $36.3 million from the prior year quarter. Earnings per share (“EPS”) was $1.32 per diluted common share for the third quarter 2022, compared to $1.19 and $0.38 per diluted common share for the linked and prior year quarters, respectively.
  • Pre-provision net revenue1 (“PPNR”) - PPNR of $64.9 million in the third quarter 2022 increased $6.5 million and $8.8 million from the linked and prior year quarters, respectively. The increase from both the linked and prior year quarters was primarily due to an increase in operating revenue, partially offset by an increase in noninterest expense. The increase compared to the prior year quarter was also partially attributed to the First Choice acquisition.
  • Net interest income and net interest margin (“NIM”) - Net interest income of $124.3 million for the third quarter 2022 increased $14.7 million and $27.0 million from the linked and prior year quarters, respectively. NIM was 4.10% for the third quarter 2022, compared to 3.55% and 3.40% for the linked and prior year quarters, respectively. Net interest income and NIM benefited from higher average loan and investment balances and expanding yields on earning assets, partially offset by higher deposit costs and a decline in average interest-earning cash.
  • Noninterest income - Noninterest income of $9.5 million for the third quarter 2022 decreased $4.7 million and $8.2 million from the linked and prior year quarters, respectively. The decline from both the linked and prior year quarters was primarily due to a decrease in tax credit income and card service revenue. The increase in market interest rates in the quarter reduced tax credit income due to the impact on tax credit projects carried at fair value. Card services revenue declined due to the Durbin Amendment cap on debit card income that became effective July 1, 2022 and reduced card services revenue by approximately $1.0 million in the third quarter.
  • Loans - Total loans increased $85.8 million from the linked quarter to $9.4 billion as of September 30, 2022. PPP loans declined $36.0 million to $13.2 million. Excluding PPP loans, loans grew $121.8 million, or 5%, on an annualized basis from the linked quarter. Loans excluding PPP have increased 7% on a year-to-date basis. Average loans totaled $9.2 billion for the quarter ended September 30, 2022, compared to $9.1 billion and $8.7 billion for the linked and prior year quarters, respectively.
  • Asset quality - The allowance for credit losses to total loans was 1.50% at September 30, 2022, compared to 1.52% at June 30, 2022 and 1.67% at September 30, 2021. Nonperforming assets to total assets was 0.14% at September 30, 2022, compared to 0.16% and 0.35% at June 30, 2022 and September 30, 2021, respectively. A provision for credit losses of $0.7 million was recorded in the third quarter 2022 due to loan growth and changes in the macroeconomic forecasts, partially offset by a shift in the risk composition of the loan portfolio.
  • Deposits - Total deposits decreased $35.0 million from the linked quarter to $11.1 billion as of September 30, 2022. Average deposits totaled $11.2 billion for the quarter ended September 30, 2022, compared to $11.5 billion and $10.3 billion for the linked and prior year quarters, respectively. At September 30, 2022, noninterest-bearing deposit accounts represented 42.0% of total deposits, and the loan to deposit ratio was 84.6%.
  • Capital - Total shareholders’ equity was $1.4 billion and the tangible common equity to tangible assets ratio3 was 7.9% at September 30, 2022, compared to 7.8% at June 30, 2022. Tangible common equity was impacted in the third quarter 2022 by a $45.3 million decrease in the tax-effected fair value of the available-for-sale investment portfolio that reduced accumulated other comprehensive income. This decrease was partially offset by the undistributed earnings in the third quarter 2022. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.2% and a total risk-based capital ratio of 13.2% as of September 30, 2022. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 11.0% and 14.2%, respectively, at September 30, 2022.



    The Company’s Board of Directors approved a quarterly dividend of $0.24 per common share, payable on December 30, 2022 to shareholders of record as of December 15, 2022, an increase of $0.01, or 4%, compared to the third quarter 2022. The Board of Directors also declared a cash dividend of $12.50 per share of Series A Preferred Stock (or $0.3125 per depositary share) representing a 5% per annum rate for the period commencing (and including) September 15, 2022 to (but excluding) December 15, 2022. The dividend will be payable on December 15, 2022 to shareholders of record on November 30, 2022.

1 Pre-provision return on average assets and pre-provision net revenue are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

2 Excludes PPP loans, which totaled $13.2 million at September 30, 2022.

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

Net Interest Income

Average Balance Sheets

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

 

Quarter ended

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

($ in thousands)

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans1, 2

$

9,230,738

 

$

118,642

 

5.10

%

 

$

9,109,131

 

$

102,328

 

4.51

%

 

$

8,666,353

 

$

94,465

 

4.32

%

Securities2

 

2,202,255

 

 

14,717

 

2.65

 

 

 

2,068,119

 

 

12,944

 

2.51

 

 

 

1,594,938

 

 

9,583

 

2.38

 

Interest-earning deposits

 

765,258

 

 

4,190

 

2.17

 

 

 

1,401,961

 

 

2,496

 

0.71

 

 

 

1,251,988

 

 

480

 

0.15

 

Total interest-earning assets

 

12,198,251

 

 

137,549

 

4.47

 

 

 

12,579,211

 

 

117,768

 

3.76

 

 

 

11,513,279

 

 

104,528

 

3.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

959,870

 

 

 

 

 

 

949,263

 

 

 

 

 

 

821,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,158,121

 

 

 

 

 

$

13,528,474

 

 

 

 

 

$

12,334,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand accounts

$

2,200,619

 

$

1,707

 

0.31

%

 

$

2,329,431

 

$

659

 

0.11

%

 

$

2,228,466

 

$

459

 

0.08

%

Money market accounts

 

2,791,822

 

 

6,067

 

0.86

 

 

 

2,767,595

 

 

2,270

 

0.33

 

 

 

2,675,405

 

 

1,294

 

0.19

 

Savings

 

828,747

 

 

69

 

0.03

 

 

 

854,860

 

 

70

 

0.03

 

 

 

747,927

 

 

61

 

0.03

 

Certificates of deposit

 

554,987

 

 

844

 

0.60

 

 

 

591,091

 

 

851

 

0.58

 

 

 

604,594

 

 

927

 

0.61

 

Total interest-bearing deposits

 

6,376,175

 

 

8,687

 

0.54

 

 

 

6,542,977

 

 

3,850

 

0.24

 

 

 

6,256,392

 

 

2,741

 

0.17

 

Subordinated debentures

 

155,225

 

 

2,313

 

5.91

 

 

 

155,092

 

 

2,257

 

5.84

 

 

 

204,011

 

 

2,855

 

5.55

 

FHLB advances

 

25,543

 

 

103

 

1.60

 

 

 

50,000

 

 

197

 

1.58

 

 

 

89,457

 

 

211

 

0.94

 

Securities sold under agreements to repurchase

 

198,027

 

 

123

 

0.25

 

 

 

202,536

 

 

41

 

0.08

 

 

 

216,403

 

 

58

 

0.11

 

Other borrowings

 

19,984

 

 

179

 

3.55

 

 

 

21,414

 

 

111

 

2.08

 

 

 

25,699

 

 

90

 

1.39

 

Total interest-bearing liabilities

 

6,774,954

 

 

11,405

 

0.67

 

 

 

6,972,019

 

 

6,456

 

0.37

 

 

 

6,791,962

 

 

5,955

 

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

4,778,720

 

 

 

 

 

 

4,987,455

 

 

 

 

 

 

4,040,761

 

 

 

 

Other liabilities

 

109,943

 

 

 

 

 

 

94,733

 

 

 

 

 

 

107,739

 

 

 

 

Total liabilities

 

11,663,617

 

 

 

 

 

 

12,054,207

 

 

 

 

 

 

10,940,462

 

 

 

 

Shareholders' equity

 

1,494,504

 

 

 

 

 

 

1,474,267

 

 

 

 

 

 

1,394,096

 

 

 

 

Total liabilities and shareholders' equity

$

13,158,121

 

 

 

 

 

$

13,528,474

 

 

 

 

 

$

12,334,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

126,144

 

 

 

 

 

$

111,312

 

 

 

 

 

$

98,573

 

 

Net interest margin

 

 

 

 

4.10

%

 

 

 

 

 

3.55

%

 

 

 

 

 

3.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Average balances include nonaccrual loans. Interest income includes loan fees of $3.6 million, $4.2 million, and $6.5 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.

2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $1.9 million, $1.7 million, and $1.3 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.

Net interest income for the third quarter was $124.3 million, an increase of $14.7 million from the linked quarter and an increase of $27.0 million from the prior year period. Interest income increased during the quarter due to higher loan and investment balances combined with an increase in market interest rates. The effective federal funds rate for the third quarter 2022 was 2.20%, an increase of 144 basis points, compared to the linked quarter, and a 211 basis point increase over the prior year quarter. Excess liquidity was redeployed into the investment portfolio which, combined with higher average loan balances, benefited the earning-asset mix. The increase in interest income was partially offset by higher interest expense on the deposit portfolio due to higher costs.

The earning asset yield was 4.47% in the third quarter 2022, an increase of 71 basis points compared to the linked quarter. The average loan yield was 5.10% in the third quarter 2022, an increase of 59 basis points from the linked quarter. The average loan yield increased due to the repricing of variable-rate loans and the origination of new loans at an average rate of 5.68%. Approximately 20% of the variable-rate loan portfolio reprices on the first day of each quarter and thus, interest income in the period did not benefit from the current quarter’s rate movement. These loans will reset early in the fourth quarter.

The average investment yield was 2.65%, an increase of 14 basis points from the linked quarter. The investment yield increased due to the purchase of new investments at higher yields due to the expansion of the investment portfolio and the reinvestment of cash flows at higher interest rates. Investments purchased in the third quarter 2022 had a tax equivalent average yield of 3.68%.

The interest-bearing liability yield was 0.67% in the third quarter 2022, an increase of 30 basis points compared to the linked quarter. The average cost of interest-bearing deposits was 0.54% in the third quarter 2022, an increase of 30 basis points over the linked quarter. The increase was primarily due to higher rates paid on commercial money market accounts, which increased 53 basis points to 0.86% in the third quarter 2022. While deposit rates have increased, the pace of increase has continued to lag the increase in loan rates, resulting in a positive impact on our NIM. The total cost of deposits, including noninterest-bearing demand accounts, was 31 basis points during the third quarter 2022.

NIM, on a tax equivalent basis, was 4.10% in the third quarter 2022, an increase of 55 basis points from the linked quarter and an increase of 70 basis points from the prior year quarter, as changing interest rates had a greater impact on assets with variable interest rates than on deposit costs.

Loans

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

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

C&I

$

1,842,510

 

 

$

1,702,081

 

 

$

1,498,151

 

 

$

1,538,155

 

 

$

1,458,078

 

CRE investor owned

 

2,106,458

 

 

 

1,977,806

 

 

 

1,982,645

 

 

 

1,955,087

 

 

 

1,935,284

 

CRE owner occupied

 

1,133,467

 

 

 

1,118,895

 

 

 

1,138,106

 

 

 

1,112,463

 

 

 

1,163,236

 

SBA loans*

 

1,269,065

 

 

 

1,284,279

 

 

 

1,249,929

 

 

 

1,241,449

 

 

 

1,199,758

 

Sponsor finance*

 

650,102

 

 

 

647,180

 

 

 

641,476

 

 

 

508,469

 

 

 

454,431

 

Life insurance premium financing*

 

717,773

 

 

 

688,035

 

 

 

636,096

 

 

 

593,562

 

 

 

572,492

 

Tax credits*

 

507,681

 

 

 

550,662

 

 

 

518,020

 

 

 

486,881

 

 

 

462,168

 

SBA PPP loans

 

13,165

 

 

 

49,175

 

 

 

134,084

 

 

 

271,958

 

 

 

438,959

 

Residential real estate

 

381,634

 

 

 

391,867

 

 

 

410,173

 

 

 

430,985

 

 

 

519,859

 

Construction and land development

 

513,452

 

 

 

626,577

 

 

 

610,830

 

 

 

625,526

 

 

 

652,227

 

Other

 

219,680

 

 

 

232,619

 

 

 

236,563

 

 

 

253,107

 

 

 

260,091

 

Total loans

$

9,354,987

 

 

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

 

 

 

 

 

 

 

 

 

Total loan yield

 

5.10

%

 

 

4.51

%

 

 

4.34

%

 

 

4.32

%

 

 

4.32

%

Variable interest rate loans to total loans

 

63

%

 

 

64

%

 

 

63

%

 

 

63

%

 

 

63

%

 

*Specialty loan category

Loans totaled $9.4 billion at September 30, 2022, increasing $85.8 million, compared to the linked quarter. PPP loans declined $36.0 million in the third quarter 2022 to $13.2 million at September 30, 2022 as a result of continued loan forgiveness by the Small Business Administration (“SBA”). Excluding PPP loans, loans grew $121.8 million, or 5% on an annualized basis, from the linked quarter. The increase was driven primarily by C&I and CRE loans, partially offset by a decline in construction loans. Average line utilization was approximately 43% for the quarter ended September 30, 2022, compared to 44% and 38.2% for the linked and prior year quarters, respectively.

Asset Quality

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

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

Nonperforming loans*

$

18,184

 

 

$

19,560

 

 

$

21,160

 

 

$

28,024

 

 

$

41,554

 

Other real estate

 

269

 

 

 

955

 

 

 

1,459

 

 

 

3,493

 

 

 

3,493

 

Nonperforming assets*

$

18,453

 

 

$

20,515

 

 

$

22,619

 

 

$

31,517

 

 

$

45,047

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

0.19

%

 

 

0.21

%

 

 

0.23

%

 

 

0.31

%

 

 

0.46

%

Nonperforming assets to total assets

 

0.14

%

 

 

0.16

%

 

 

0.17

%

 

 

0.23

%

 

 

0.35

%

Allowance for credit losses to total loans

 

1.50

%

 

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

Net charge-offs (recoveries)

$

478

 

 

$

(175

)

 

$

1,521

 

 

$

3,263

 

 

$

1,850

 

 

 

 

 

 

 

 

 

 

 

*Guaranteed balances excluded

$

6,532

 

 

$

6,063

 

 

$

3,954

 

 

$

6,481

 

 

$

5,109

 

Nonperforming assets declined $2.1 million during the third quarter 2022 and $26.6 million from the prior year quarter. Net charge-offs to average loans were two basis points in the third quarter 2022, compared to one basis point of net recoveries in the linked quarter and eight basis points of net charge-offs in the prior year quarter. The Company recorded a provision for credit losses of $0.7 million in both the linked and current quarters, compared to $19.7 million in the prior year quarter. The prior year quarter included a provision for credit losses of $23.9 million to establish the initial allowance for credit losses on certain First Choice acquired loans.

The allowance for credit losses to total loans was 1.50% at September 30, 2022, a decrease of two basis points from the linked quarter. Loan growth and a worsening economic forecast increased the allowance for credit losses during the quarter. This increase was partially offset by the improvement in credit quality and a shift in the composition of the loan portfolio to categories with lower reserve levels. Loan growth in the quarter primarily was in commercial real estate and C&I loans that have a lower reserve level, while construction loans with a higher reserve level declined.

Deposits

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

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

Noninterest-bearing demand accounts

$

4,642,539

 

 

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

4,375,713

 

Interest-bearing demand accounts

 

2,270,898

 

 

 

2,197,957

 

 

 

2,547,482

 

 

 

2,465,884

 

 

 

2,253,639

 

Money market and savings accounts

 

3,617,249

 

 

 

3,562,982

 

 

 

3,678,135

 

 

 

3,691,186

 

 

 

3,571,252

 

Brokered certificates of deposit

 

129,039

 

 

 

129,064

 

 

 

129,017

 

 

 

128,970

 

 

 

128,923

 

Other certificates of deposit

 

397,869

 

 

 

456,137

 

 

 

468,458

 

 

 

479,323

 

 

 

498,248

 

Total deposit portfolio

$

11,057,594

 

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

10,827,775

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits to total deposits

 

42.0

%

 

 

42.8

%

 

 

41.7

%

 

 

40.4

%

 

 

40.4

%

Total deposits at September 30, 2022 were $11.1 billion, a decrease of $35.0 million from June 30, 2022, and an increase of $229.8 million from September 30, 2021. Noninterest-bearing deposits declined $103.9 million from the linked quarter, primarily due to a large commercial client outflow related to a company acquisition in the Kansas City market. The total cost of deposits was 0.31% for the current quarter, compared to 0.13% for the linked quarter and 0.11% for the prior year quarter.

Noninterest Income and Expense

The following tables present a comparative summary of the major components of noninterest income, other income, and noninterest expense for the periods indicated:

 

Linked quarter comparison

 

Prior year comparison

 

Quarter ended

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

Increase

(decrease)

 

September 30,

2021

 

Increase

(decrease)

Deposit service charges

 

4,951

 

 

 

4,749

 

$

202

 

 

4

%

 

$

4,520

 

$

431

 

 

10

%

Wealth management revenue

 

2,432

 

 

 

2,533

 

 

(101

)

 

(4

)%

 

 

2,573

 

 

(141

)

 

(5

)%

Card services revenue

 

2,652

 

 

 

3,514

 

 

(862

)

 

(25

)%

 

 

3,186

 

 

(534

)

 

(17

)%

Tax credit income (loss)

 

(3,625

)

 

 

1,186

 

 

(4,811

)

 

(406

)%

 

 

3,325

 

 

(6,950

)

 

(209

)%

Other income

 

3,044

 

 

 

2,212

 

 

832

 

 

38

%

 

 

4,015

 

 

(971

)

 

(24

)%

Total noninterest income

$

9,454

 

 

$

14,194

 

$

(4,740

)

 

(33

)%

 

$

17,619

 

$

(8,165

)

 

(46

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income for the third quarter 2022 was $9.5 million, a decrease of $4.7 million from the linked quarter and a decrease of $8.2 million from the prior year quarter. The decrease from the linked and prior year quarters was primarily due to decreases in tax credit income and card services revenue. Rising interest rates reduced tax credit income due to the impact on tax credit projects carried at fair value. The rise in interest rates in the third quarter 2022 increased the discount rate used in the fair value of these projects, resulting in a lower fair value. The Durbin Amendment limits the amount of interchange income the Company can earn on debit card transactions. This limitation went into effect for the Company in the third quarter 2022 and reduced card services revenue.

 

Linked quarter comparison

 

Prior year comparison

 

Quarter ended

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

Increase

(decrease)

 

September 30,

2021

 

Increase

(decrease)

BOLI

$

769

 

$

748

 

$

21

 

 

3

%

 

$

739

 

$

30

 

 

4

%

Community development investments

 

170

 

 

193

 

 

(23

)

 

(12

)%

 

 

206

 

 

(36

)

 

(17

)%

Mortgage banking

 

45

 

 

43

 

 

2

 

 

5

%

 

 

509

 

 

(464

)

 

(91

)%

Private equity fund distribution

 

64

 

 

240

 

 

(176

)

 

(73

)%

 

 

359

 

 

(295

)

 

(82

)%

Servicing fees

 

655

 

 

165

 

 

490

 

 

297

%

 

 

887

 

 

(232

)

 

(26

)%

Swap fees

 

166

 

 

102

 

 

64

 

 

63

%

 

 

43

 

 

123

 

 

286

%

Miscellaneous income

 

1,175

 

 

721

 

 

454

 

 

63

%

 

 

1,272

 

 

(97

)

 

(8

)%

Total other income

$

3,044

 

$

2,212

 

$

832

 

 

38

%

 

$

4,015

 

$

(971

)

 

(24

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community development and private equity distributions included in other income are not consistent sources of income and fluctuate based on distributions from the underlying funds. Servicing fee income may also fluctuate based on prepayment experience and changes to the discount rate used in the valuation of the servicing rights. Mortgage banking revenue has declined since the prior year quarter due to higher interest rates that have reduced sales volume.

 

Linked quarter comparison

 

Prior year comparison

 

Quarter ended

 

Quarter ended

($ in thousands)

September 30,

2022

 

June 30,

2022

 

Increase

(decrease)

 

September 30,

2021

 

Increase

(decrease)

Employee compensation and benefits

$

36,999

 

$

36,028

 

$

971

 

3

%

 

$

33,722

 

$

3,277

 

 

10

%

Occupancy

 

4,497

 

 

4,309

 

 

188

 

4

%

 

 

4,496

 

 

1

 

 

%

Branch closure expenses

 

 

 

 

 

 

%

 

 

3,441

 

 

(3,441

)

 

(100

)%

Merger-related expenses

 

 

 

 

 

 

%

 

 

14,671

 

 

(14,671

)

 

(100

)%

Other expense

 

27,347

 

 

25,087

 

 

2,260

 

9

%

 

 

20,555

 

 

6,792

 

 

33

%

Total noninterest expense

$

68,843

 

$

65,424

 

$

3,419

 

5

%

 

$

76,885

 

$

(8,042

)

 

(10

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense was $68.8 million for the third quarter 2022, compared to $65.4 million for the linked quarter, and $76.9 million for the prior year quarter. Employee compensation and benefits increased $1.0 million from the linked quarter due to an increase in full-time equivalent associates and higher performance-based incentive accruals. Other expense increased $2.3 million from the linked quarter primarily due to a $1.8 million increase in variable deposit costs in certain of the Company’s specialized deposit businesses that are impacted by higher interest rates. The decrease in noninterest expense of $8.0 million from the prior year quarter was primarily due to the merger costs from the First Choice acquisition and branch closure expenses recognized in the prior year quarter, offset by merit increases throughout 2021 and 2022 and an increase in variable deposit costs due to higher average balances and interest-rate trends.

For the third quarter 2022, the Company’s efficiency ratio was 51.5%, compared to 52.8% and 66.9% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio4 was 51.5% for the quarter ended September 30, 2022, compared to 52.8% for the linked quarter and 51.3% for the prior year quarter.

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

Income Taxes

The Company’s effective tax rate was 22% for both the quarter ended September 30, 2022 and June 30, 2022, compared to 24% for the prior year quarter. The Company’s effective tax rate in the prior year quarter was higher due to certain non-deductible merger expenses.

Capital

The following table presents total equity and various EFSC capital ratios for the most recent five quarters:

 

Quarter ended

Percent

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

Shareholders’ equity

$

1,446,218

 

 

$

1,447,412

 

 

$

1,473,177

 

 

$

1,529,116

 

 

$

1,439,635

 

Total risk-based capital to risk-weighted assets

 

14.2

%

 

 

14.2

%

 

 

14.4

%

 

 

14.7

%

 

 

14.5

%

Tier 1 capital to risk weighted assets

 

12.6

%

 

 

12.5

%

 

 

12.7

%

 

 

13.0

%

 

 

12.2

%

Common equity tier 1 capital to risk-weighted assets

 

11.0

%

 

 

10.9

%

 

 

11.0

%

 

 

11.3

%

 

 

11.2

%

Tangible common equity to tangible assets

 

7.9

%

 

 

7.8

%

 

 

7.6

%

 

 

8.1

%

 

 

8.4

%

Leverage ratio

 

10.4

%

 

 

9.8

%

 

 

9.6

%

 

 

9.7

%

 

 

9.7

%

Total equity was $1.4 billion at September 30, 2022, a decrease of $1.2 million from the linked quarter. The decrease from the linked quarter was primarily due to a $44.7 million decline in accumulated other comprehensive income and $9.5 million in common and preferred dividends. These decreases were partially offset by current period net income of $50.2 million. The decline in accumulated other comprehensive income was due to a net fair value decline in the Company’s fixed-rate, available-for-sale investment portfolio from an increase in interest rates during the period. The Company’s tangible common book value per share was $26.62 at September 30, 2022, compared to $26.63 and $27.38 in the linked and prior year quarters, respectively.

The Company’s regulatory capital ratios continue to exceed the “well-capitalized” regulatory benchmark. Capital ratios for the current quarter are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

Use of Non-GAAP Financial Measures

The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as tangible common equity, PPNR, PPNR return on average assets (“PPNR ROAA”), financial metrics adjusted for PPP impact, core efficiency ratio, and the tangible common equity ratio, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its tangible common equity, PPNR, PPNR ROAA, financial metrics adjusted for PPP impact, core efficiency ratio, and the tangible common equity ratio, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as merger-related expenses, facilities charges, and the gain or loss on sale of investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis. The attached tables contain a reconciliation of these core performance measures to the GAAP measures. The Company believes that the tangible common equity ratio provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.

The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength. The Company’s management uses, and believes that investors benefit from referring to, these non-GAAP measures and ratios in assessing the Company’s operating results and related trends and when forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP. In the attached tables, the Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measures for the periods indicated.

Conference Call and Webcast Information

The Company will host a conference call and webcast at 10:00 a.m. Central Time on Tuesday, October 25, 2022. During the call, management will review the third quarter 2022 results and related matters. This press release as well as a related slide presentation will be accessible on the Company’s website at www.enterprisebank.com under “Investor Relations” prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-888-550-5279 (Conference ID #7004515). A recorded replay of the conference call will be available on the website approximately two hours after the call’s completion. Visit https://bit.ly/EFSC3Q2022 to register. The replay will be available for approximately two weeks following the conference call.

About Enterprise Financial Services Corp

Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.0 billion in assets, is a financial holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly-owned subsidiary of EFSC, operates branch offices in Arizona, California, 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, yields and returns, loan diversification and credit management, shareholder value creation and the impact of the First Choice acquisition and other acquisitions.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions, including the First Choice acquisition, into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic 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, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, changes in the method of determining LIBOR and the phase out of LIBOR, natural disasters, terrorist activities, war and geopolitical matters (including the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, including the COVID-19 pandemic, and their effects on economic and business environments in which we operate, including the ongoing disruption to the financial market and other economic activity caused by the continuing COVID-19 pandemic, and those factors and risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.

For any forward-looking statements made in this press release or in any documents, EFSC claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Readers are cautioned not to place undue reliance on any forward-looking statements. Except to the extent required by applicable law or regulation, EFSC disclaims any obligation to revise or publicly release any revision or update to any of the forward-looking statements included herein to reflect events or circumstances that occur after the date on which such statements were made.

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited)

 

 

Quarter ended

 

Nine months ended

(in thousands, except per share data)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Sep 30,

2022

 

Sep 30,

2021

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

124,290

 

 

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

335,068

 

 

$

258,134

 

Provision (benefit) for credit losses

 

676

 

 

 

658

 

 

 

(4,068

)

 

 

(3,660

)

 

 

19,668

 

 

 

(2,734

)

 

 

17,045

 

Noninterest income

 

9,454

 

 

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

42,289

 

 

 

45,113

 

Noninterest expense

 

68,843

 

 

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

197,067

 

 

 

182,225

 

Income before income tax expense

 

64,225

 

 

 

57,725

 

 

 

61,074

 

 

 

64,656

 

 

 

18,339

 

 

 

183,024

 

 

 

103,977

 

Income tax expense

 

14,025

 

 

 

12,576

 

 

 

13,381

 

 

 

13,845

 

 

 

4,426

 

 

 

39,982

 

 

 

21,733

 

Net income

 

50,200

 

 

 

45,149

 

 

 

47,693

 

 

 

50,811

 

 

 

13,913

 

 

 

143,042

 

 

 

82,244

 

Preferred stock dividends

 

937

 

 

 

938

 

 

 

1,229

 

 

 

 

 

 

 

 

 

3,104

 

 

 

 

Net income available to common shareholders

$

49,263

 

 

$

44,211

 

 

$

46,464

 

 

$

50,811

 

 

$

13,913

 

 

$

139,938

 

 

$

82,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.32

 

 

$

1.19

 

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

 

$

3.73

 

 

$

2.48

 

Return on average assets

 

1.51

%

 

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

 

 

1.42

%

 

 

1.01

%

Return on average common equity

 

13.74

%

 

 

12.65

%

 

 

12.87

%

 

 

13.81

%

 

 

3.96

%

 

 

13.09

%

 

 

9.14

%

Return on average tangible common equity1

 

18.82

%

 

 

17.44

%

 

 

17.49

%

 

 

18.81

%

 

 

5.37

%

 

 

17.92

%

 

 

12.31

%

Net interest margin (tax equivalent)

 

4.10

%

 

 

3.55

%

 

 

3.28

%

 

 

3.32

%

 

 

3.40

%

 

 

3.64

%

 

 

3.45

%

Efficiency ratio

 

51.47

%

 

 

52.84

%

 

 

52.42

%

 

 

51.08

%

 

 

66.92

%

 

 

52.22

%

 

 

60.09

%

Core efficiency ratio1

 

51.47

%

 

 

52.81

%

 

 

52.43

%

 

 

49.22

%

 

 

51.30

%

 

 

52.21

%

 

 

52.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

9,354,987

 

 

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

 

 

 

Average loans

$

9,230,738

 

 

$

9,109,131

 

 

$

9,005,875

 

 

$

9,030,982

 

 

$

8,666,353

 

 

$

9,116,072

 

 

$

7,727,265

 

Assets

$

12,994,787

 

 

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

 

 

 

Average assets

$

13,158,121

 

 

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

 

$

13,431,863

 

 

$

10,860,756

 

Deposits

$

11,057,594

 

 

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

10,827,775

 

 

 

 

 

Average deposits

$

11,154,895

 

 

$

11,530,432

 

 

$

11,494,212

 

 

$

11,167,003

 

 

$

10,297,153

 

 

$

11,391,937

 

 

$

9,035,902

 

Period end common shares outstanding

 

37,223

 

 

 

37,206

 

 

 

37,516

 

 

 

37,820

 

 

 

38,372

 

 

 

 

 

Dividends per common share

$

0.23

 

 

$

0.22

 

 

$

0.21

 

 

$

0.20

 

 

$

0.19

 

 

$

0.66

 

 

$

0.55

 

Tangible book value per common share

$

26.62

 

 

$

26.63

 

 

$

27.06

 

 

$

28.28

 

 

$

27.38

 

 

 

 

 

Tangible common equity to tangible assets1

 

7.86

%

 

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

 

 

 

 

Total risk-based capital to risk-weighted assets

 

14.2

%

 

 

14.2

%

 

 

14.4

%

 

 

14.7

%

 

 

14.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

 

Nine months ended

($ in thousands, except per share data)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Sep 30,

2022

 

Sep 30,

2021

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

135,695

 

 

$

116,069

 

$

106,581

 

 

$

107,641

 

 

$

103,228

 

$

358,345

 

 

$

275,589

Interest expense

 

11,405

 

 

 

6,456

 

 

5,416

 

 

 

5,581

 

 

 

5,955

 

 

23,277

 

 

 

17,455

Net interest income

 

124,290

 

 

 

109,613

 

 

101,165

 

 

 

102,060

 

 

 

97,273

 

 

335,068

 

 

 

258,134

Provision (benefit) for credit losses

 

676

 

 

 

658

 

 

(4,068

)

 

 

(3,660

)

 

 

19,668

 

 

(2,734

)

 

 

17,045

Net interest income after provision (benefit) for credit losses

 

123,614

 

 

 

108,955

 

 

105,233

 

 

 

105,720

 

 

 

77,605

 

 

337,802

 

 

 

241,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit service charges

 

4,951

 

 

 

4,749

 

 

4,163

 

 

 

3,962

 

 

 

4,520

 

 

13,863

 

 

 

11,466

Wealth management revenue

 

2,432

 

 

 

2,533

 

 

2,622

 

 

 

2,687

 

 

 

2,573

 

 

7,587

 

 

 

7,572

Card services revenue

 

2,652

 

 

 

3,514

 

 

3,040

 

 

 

3,223

 

 

 

3,186

 

 

9,206

 

 

 

8,657

Tax credit income (loss)

 

(3,625

)

 

 

1,186

 

 

2,608

 

 

 

4,374

 

 

 

3,325

 

 

169

 

 

 

3,654

Other income

 

3,044

 

 

 

2,212

 

 

6,208

 

 

 

8,384

 

 

 

4,015

 

 

11,464

 

 

 

13,764

Total noninterest income

 

9,454

 

 

 

14,194

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

42,289

 

 

 

45,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

36,999

 

 

 

36,028

 

 

35,827

 

 

 

33,488

 

 

 

33,722

 

 

108,854

 

 

 

91,416

Occupancy

 

4,497

 

 

 

4,309

 

 

4,586

 

 

 

4,510

 

 

 

4,496

 

 

13,392

 

 

 

11,776

Branch closure expenses

 

 

 

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

3,441

Merger-related expenses

 

 

 

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

 

 

 

19,762

Other expense

 

27,347

 

 

 

25,087

 

 

22,387

 

 

 

23,376

 

 

 

20,555

 

 

74,821

 

 

 

55,830

Total noninterest expense

 

68,843

 

 

 

65,424

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

197,067

 

 

 

182,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

64,225

 

 

 

57,725

 

 

61,074

 

 

 

64,656

 

 

 

18,339

 

 

183,024

 

 

 

103,977

Income tax expense

 

14,025

 

 

 

12,576

 

 

13,381

 

 

 

13,845

 

 

 

4,426

 

 

39,982

 

 

 

21,733

Net income

$

50,200

 

 

$

45,149

 

$

47,693

 

 

$

50,811

 

 

$

13,913

 

$

143,042

 

 

$

82,244

Preferred stock dividends

 

937

 

 

 

938

 

 

1,229

 

 

 

 

 

 

 

 

3,104

 

 

 

Net income available to common shareholders

$

49,263

 

 

$

44,211

 

$

46,464

 

 

$

50,811

 

 

$

13,913

 

$

139,938

 

 

$

82,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.32

 

 

$

1.19

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

$

3.74

 

 

$

2.48

Diluted earnings per common share

$

1.32

 

 

$

1.19

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

$

3.73

 

 

$

2.48

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

264,078

 

 

$

271,763

 

 

$

252,706

 

 

$

209,177

 

 

$

179,826

 

Interest-earning deposits

 

489,825

 

 

 

680,343

 

 

 

1,735,708

 

 

 

1,819,508

 

 

 

1,216,470

 

Debt and equity investments

 

2,171,942

 

 

 

2,172,318

 

 

 

1,993,927

 

 

 

1,855,583

 

 

 

1,717,442

 

Loans held for sale

 

785

 

 

 

4,615

 

 

 

4,270

 

 

 

6,389

 

 

 

5,068

 

 

 

 

 

 

 

 

 

 

 

Loans

 

9,354,987

 

 

 

9,269,176

 

 

 

9,056,073

 

 

 

9,017,642

 

 

 

9,116,583

 

Allowance for credit losses

 

(140,572

)

 

 

(140,546

)

 

 

(139,212

)

 

 

(145,041

)

 

 

(152,096

)

Total loans, net

 

9,214,415

 

 

 

9,128,630

 

 

 

8,916,861

 

 

 

8,872,601

 

 

 

8,964,487

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

43,882

 

 

 

46,028

 

 

 

46,900

 

 

 

47,915

 

 

 

48,697

 

Goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

Intangible assets, net

 

18,217

 

 

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

Other assets

 

426,479

 

 

 

396,117

 

 

 

370,378

 

 

 

338,735

 

 

 

366,834

 

Total assets

$

12,994,787

 

 

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

4,642,539

 

 

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

4,375,713

 

Interest-bearing deposits

 

6,415,055

 

 

 

6,346,140

 

 

 

6,823,092

 

 

 

6,765,363

 

 

 

6,452,062

 

Total deposits

 

11,057,594

 

 

 

11,092,618

 

 

 

11,704,135

 

 

 

11,343,799

 

 

 

10,827,775

 

Subordinated debentures

 

155,298

 

 

 

155,164

 

 

 

155,031

 

 

 

154,899

 

 

 

204,103

 

FHLB advances

 

 

 

 

50,000

 

 

 

50,000

 

 

 

50,000

 

 

 

50,000

 

Other borrowings

 

197,422

 

 

 

226,695

 

 

 

228,846

 

 

 

353,863

 

 

 

243,770

 

Other liabilities

 

138,255

 

 

 

112,617

 

 

 

95,580

 

 

 

105,681

 

 

 

122,733

 

Total liabilities

 

11,548,569

 

 

 

11,637,094

 

 

 

12,233,592

 

 

 

12,008,242

 

 

 

11,448,381

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

 

Common stock

 

372

 

 

 

372

 

 

 

395

 

 

 

398

 

 

 

404

 

Treasury stock

 

 

 

 

 

 

 

(73,528

)

 

 

(73,528

)

 

 

(73,528

)

Additional paid-in capital

 

979,543

 

 

 

976,684

 

 

 

1,010,446

 

 

 

1,018,799

 

 

 

1,031,146

 

Retained earnings

 

547,506

 

 

 

506,849

 

 

 

523,136

 

 

 

492,682

 

 

 

461,711

 

Accumulated other comprehensive income (loss)

 

(153,191

)

 

 

(108,481

)

 

 

(59,260

)

 

 

18,777

 

 

 

19,902

 

Total shareholders’ equity

 

1,446,218

 

 

 

1,447,412

 

 

 

1,473,177

 

 

 

1,529,116

 

 

 

1,439,635

 

Total liabilities and shareholders’ equity

$

12,994,787

 

 

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

Nine months ended

 

September 30, 2022

 

September 30, 2021

($ in thousands)

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans1, 2

$

9,116,072

 

$

317,271

 

4.65

%

 

$

7,727,264

 

$

250,699

 

4.34

%

Securities2

 

2,065,800

 

 

38,631

 

2.50

 

 

 

1,505,592

 

 

27,627

 

2.45

 

Interest-earning deposits

 

1,312,442

 

 

7,502

 

0.76

 

 

 

914,954

 

 

906

 

0.13

 

Total interest-earning assets

 

12,494,314

 

 

363,404

 

3.89

 

 

 

10,147,810

 

 

279,232

 

3.68

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

937,549

 

 

 

 

 

 

712,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,431,863

 

 

 

 

 

$

10,860,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand accounts

$

2,344,007

 

$

2,902

 

0.17

%

 

$

2,035,029

 

$

1,123

 

0.07

%

Money market accounts

 

2,810,278

 

 

9,797

 

0.47

 

 

 

2,458,146

 

 

3,257

 

0.18

 

Savings

 

833,721

 

 

205

 

0.03

 

 

 

707,269

 

 

161

 

0.03

 

Certificates of deposit

 

584,213

 

 

2,492

 

0.57

 

 

 

555,045

 

 

3,329

 

0.80

 

Total interest-bearing deposits

 

6,572,219

 

 

15,396

 

0.31

 

 

 

5,755,489

 

 

7,870

 

0.18

 

Subordinated debentures

 

155,093

 

 

6,790

 

5.85

 

 

 

203,853

 

 

8,521

 

5.59

 

FHLB advances

 

41,758

 

 

495

 

1.58

 

 

 

63,297

 

 

603

 

1.27

 

Securities sold under agreements to repurchase

 

220,703

 

 

224

 

0.14

 

 

 

218,942

 

 

176

 

0.11

 

Other borrowings

 

21,402

 

 

372

 

2.32

 

 

 

27,154

 

 

285

 

1.40

 

Total interest-bearing liabilities

 

7,011,175

 

 

23,277

 

0.44

 

 

 

6,268,735

 

 

17,455

 

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

4,819,718

 

 

 

 

 

 

3,280,414

 

 

 

 

Other liabilities

 

99,458

 

 

 

 

 

 

108,001

 

 

 

 

Total liabilities

 

11,930,351

 

 

 

 

 

 

9,657,150

 

 

 

 

Shareholders' equity

 

1,501,512

 

 

 

 

 

 

1,203,606

 

 

 

 

Total liabilities and shareholders' equity

$

13,431,863

 

 

 

 

 

$

10,860,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

340,127

 

 

 

 

 

$

261,777

 

 

Net interest margin

 

 

 

 

3.64

%

 

 

 

 

 

3.45

%

 

 

 

 

 

 

 

 

 

 

 

 

1 Average balances include nonaccrual loans. Interest income includes loan fees of $13.0 million and $22.1 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.

2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $5.1 million and $3.6 million for the nine months ended September 30, 2022 and 2021, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

LOAN PORTFOLIO

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

3,709,893

 

 

$

3,596,701

 

 

$

3,398,723

 

 

$

3,392,375

 

 

$

3,379,171

 

Commercial real estate

 

4,438,647

 

 

 

4,294,375

 

 

 

4,278,138

 

 

 

4,176,928

 

 

 

4,179,712

 

Construction real estate

 

583,649

 

 

 

724,163

 

 

 

702,630

 

 

 

734,073

 

 

 

747,758

 

Residential real estate

 

397,450

 

 

 

413,727

 

 

 

432,639

 

 

 

454,052

 

 

 

542,690

 

Other

 

225,348

 

 

 

240,210

 

 

 

243,943

 

 

 

260,214

 

 

 

267,252

 

Total loans

$

9,354,987

 

 

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT PORTFOLIO

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand accounts

$

4,642,539

 

 

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

4,375,713

 

Interest-bearing demand accounts

 

2,270,898

 

 

 

2,197,957

 

 

 

2,547,482

 

 

 

2,465,884

 

 

 

2,253,639

 

Money market and savings accounts

 

3,617,249

 

 

 

3,562,982

 

 

 

3,678,135

 

 

 

3,691,186

 

 

 

3,571,252

 

Brokered certificates of deposit

 

129,039

 

 

 

129,064

 

 

 

129,017

 

 

 

128,970

 

 

 

128,923

 

Other certificates of deposit

 

397,869

 

 

 

456,137

 

 

 

468,458

 

 

 

479,323

 

 

 

498,248

 

Total deposits

$

11,057,594

 

 

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

10,827,775

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

Loans

$

9,230,738

 

 

$

9,109,131

 

 

$

9,005,875

 

 

$

9,030,982

 

 

$

8,666,353

 

Securities

 

2,202,255

 

 

 

2,068,119

 

 

 

1,923,969

 

 

 

1,753,159

 

 

 

1,594,938

 

Interest-earning assets

 

12,198,251

 

 

 

12,579,211

 

 

 

12,711,116

 

 

 

12,373,149

 

 

 

11,513,279

 

Assets

 

13,158,121

 

 

 

13,528,474

 

 

 

13,614,003

 

 

 

13,267,193

 

 

 

12,334,558

 

Deposits

 

11,154,895

 

 

 

11,530,432

 

 

 

11,494,212

 

 

 

11,167,003

 

 

 

10,297,153

 

Shareholders’ equity

 

1,494,504

 

 

 

1,474,267

 

 

 

1,536,221

 

 

 

1,495,396

 

 

 

1,394,096

 

Tangible common equity1

 

1,038,495

 

 

 

1,016,940

 

 

 

1,077,529

 

 

 

1,071,902

 

 

 

1,028,001

 

 

 

 

 

 

 

 

 

 

 

YIELDS (tax equivalent)

 

 

 

 

 

 

 

 

 

Loans

 

5.10

%

 

 

4.51

%

 

 

4.34

%

 

 

4.32

%

 

 

4.32

%

Securities

 

2.65

 

 

 

2.51

 

 

 

2.31

 

 

 

2.30

 

 

 

2.38

 

Interest-earning assets

 

4.47

 

 

 

3.76

 

 

 

3.45

 

 

 

3.50

 

 

 

3.60

 

Interest-bearing deposits

 

0.54

 

 

 

0.24

 

 

 

0.17

 

 

 

0.17

 

 

 

0.17

 

Deposits

 

0.31

 

 

 

0.13

 

 

 

0.10

 

 

 

0.10

 

 

 

0.11

 

Subordinated debentures

 

5.91

 

 

 

5.84

 

 

 

5.81

 

 

 

5.64

 

 

 

5.55

 

FHLB advances and other borrowed funds

 

0.66

 

 

 

0.51

 

 

 

0.41

 

 

 

0.43

 

 

 

0.43

 

Interest-bearing liabilities

 

0.67

 

 

 

0.37

 

 

 

0.30

 

 

 

0.31

 

 

 

0.35

 

Net interest margin

 

4.10

 

 

 

3.55

 

 

 

3.28

 

 

 

3.32

 

 

 

3.40

 

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

PPP details:

 

Quarter ended

($ in thousands, except per share data)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

PPP loans outstanding, net of deferred fees

$

13,165

 

 

$

49,175

 

 

$

134,084

 

 

$

271,958

 

 

$

438,959

 

Average PPP loans outstanding, net

 

26,113

 

 

 

89,152

 

 

 

194,382

 

 

 

365,295

 

 

 

489,104

 

PPP interest and fee income recognized

 

471

 

 

 

1,557

 

 

 

2,858

 

 

 

4,864

 

 

 

6,048

 

PPP deferred fees remaining

 

119

 

 

 

524

 

 

 

1,851

 

 

 

4,215

 

 

 

7,428

 

PPP average yield

 

7.16

%

 

 

7.01

%

 

 

5.96

%

 

 

5.28

%

 

 

4.91

%

 

Quarter ended

 

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

Financial Metrics:

As

Reported

 

Excluding

PPP*

 

As

Reported

 

Excluding

PPP*

 

As

Reported

 

Excluding

PPP*

 

As

Reported

 

Excluding

PPP*

 

As

Reported

 

Excluding

PPP*

EPS

$

1.32

 

 

$

1.31

 

 

$

1.19

 

 

$

1.15

 

 

$

1.23

 

 

$

1.17

 

 

$

1.33

 

 

$

1.23

 

 

$

0.38

 

 

$

0.25

 

ROAA

 

1.51

%

 

 

1.51

%

 

 

1.34

%

 

 

1.31

%

 

 

1.42

%

 

 

1.38

%

 

 

1.52

%

 

 

1.45

%

 

 

0.45

%

 

 

0.31

%

PPNR ROAA*

 

1.96

%

 

 

1.95

%

 

 

1.73

%

 

 

1.70

%

 

 

1.70

%

 

 

1.64

%

 

 

1.89

%

 

 

1.80

%

 

 

1.81

%

 

 

1.68

%

Tangible common equity/tangible assets*

 

7.86

%

 

 

7.86

%

 

 

7.80

%

 

 

7.83

%

 

 

7.62

%

 

 

7.70

%

 

 

8.13

%

 

 

8.31

%

 

 

8.40

%

 

 

8.71

%

Leverage ratio

 

10.4

%

 

 

10.4

%

 

 

9.8

%

 

 

9.8

%

 

 

9.6

%

 

 

9.7

%

 

 

9.7

%

 

 

10.0

%

 

 

9.7

%

 

 

10.2

%

NIM

 

4.10

%

 

 

4.10

%

 

 

3.55

%

 

 

3.52

%

 

 

3.28

%

 

 

3.23

%

 

 

3.32

%

 

 

3.26

%

 

 

3.40

%

 

 

3.33

%

Allowance for credit losses/loans

 

1.50

%

 

 

1.67

%

 

 

1.52

%

 

 

1.69

%

 

 

1.54

%

 

 

1.73

%

 

 

1.61

%

 

 

1.84

%

 

 

1.67

%

 

 

1.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables. Calculations not adjusted for increase in average deposits or increase in deposit expense, as applicable. The ratio of allowance for credit losses to loans excludes all guaranteed loans, including PPP loans.

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

(in thousands, except per share data)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

ASSET QUALITY

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

$

478

 

 

$

(175

)

 

$

1,521

 

 

$

3,263

 

 

$

1,850

 

Nonperforming loans

 

18,184

 

 

 

19,560

 

 

 

21,160

 

 

 

28,024

 

 

 

41,554

 

Classified assets

 

98,078

 

 

 

96,801

 

 

 

93,199

 

 

 

100,797

 

 

 

104,220

 

Nonperforming loans to total loans

 

0.19

%

 

 

0.21

%

 

 

0.23

%

 

 

0.31

%

 

 

0.46

%

Nonperforming assets to total assets

 

0.14

%

 

 

0.16

%

 

 

0.17

%

 

 

0.23

%

 

 

0.35

%

Allowance for credit losses to total loans

 

1.50

%

 

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

Allowance for credit losses to nonperforming loans

 

773.1

%

 

 

718.5

%

 

 

657.9

%

 

 

517.6

%

 

 

366.0

%

Net charge-offs (recoveries) to average loans -annualized

 

0.02

%

 

 

(0.01

)%

 

 

0.07

%

 

 

0.14

%

 

 

0.08

%

 

 

 

 

 

 

 

 

 

 

WEALTH MANAGEMENT

 

 

 

 

 

 

 

 

 

Trust assets under management

$

1,691,230

 

 

$

1,757,228

 

 

$

1,943,428

 

 

$

2,083,543

 

 

$

2,017,178

 

Trust assets under administration

 

2,138,636

 

 

 

2,184,019

 

 

 

2,400,679

 

 

 

2,556,266

 

 

 

2,486,152

 

 

 

 

 

 

 

 

 

 

 

MARKET DATA

 

 

 

 

 

 

 

 

 

Book value per common share

$

36.92

 

 

$

36.97

 

 

$

37.35

 

 

$

38.53

 

 

$

37.52

 

Tangible book value per common share1

$

26.62

 

 

$

26.63

 

 

$

27.06

 

 

$

28.28

 

 

$

27.38

 

Market value per share

$

44.04

 

 

$

41.50

 

 

$

47.31

 

 

$

47.09

 

 

$

45.28

 

Period end common shares outstanding

 

37,223

 

 

 

37,206

 

 

 

37,516

 

 

 

37,820

 

 

 

38,372

 

Average basic common shares

 

37,241

 

 

 

37,243

 

 

 

37,788

 

 

 

38,228

 

 

 

36,878

 

Average diluted common shares

 

37,348

 

 

 

37,282

 

 

 

37,858

 

 

 

38,311

 

 

 

36,946

 

 

 

 

 

 

 

 

 

 

 

CAPITAL

 

 

 

 

 

 

 

 

 

Total risk-based capital to risk-weighted assets

 

14.2

%

 

 

14.2

%

 

 

14.4

%

 

 

14.7

%

 

 

14.5

%

Tier 1 capital to risk-weighted assets

 

12.6

%

 

 

12.5

%

 

 

12.7

%

 

 

13.0

%

 

 

12.2

%

Common equity tier 1 capital to risk-weighted assets

 

11.0

%

 

 

10.9

%

 

 

11.0

%

 

 

11.3

%

 

 

11.2

%

Tangible common equity to tangible assets1

 

7.9

%

 

 

7.8

%

 

 

7.6

%

 

 

8.1

%

 

 

8.4

%

 

 

 

 

 

 

 

 

 

 

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

ENTERPRISE FINANCIAL SERVICES CORP

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

 

Quarter ended

 

Nine months ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Sep 30,

2022

 

Sep 30,

2021

CORE PERFORMANCE MEASURES

 

 

 

 

Net interest income

$

124,290

 

 

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

335,068

 

 

$

258,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

9,454

 

 

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

42,289

 

 

 

45,113

 

Less gain (loss) on sale of other real estate owned

 

(22

)

 

 

(90

)

 

 

19

 

 

 

 

 

 

335

 

 

 

(93

)

 

 

884

 

Total core revenue

 

133,766

 

 

 

123,897

 

 

 

119,787

 

 

 

124,690

 

 

 

114,557

 

 

 

377,450

 

 

 

302,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

68,843

 

 

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

197,067

 

 

 

182,225

 

Less branch closure expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

 

3,441

 

Less merger-related expenses

 

 

 

 

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

 

 

 

 

19,762

 

Core noninterest expense

 

68,843

 

 

 

65,424

 

 

 

62,800

 

 

 

61,374

 

 

 

58,773

 

 

 

197,067

 

 

 

159,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core efficiency ratio

 

51.47

%

 

 

52.81

%

 

 

52.43

%

 

 

49.22

%

 

 

51.30

%

 

 

52.21

%

 

 

52.59

%

 

Quarter ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

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

Shareholders’ equity

$

1,446,218

 

 

$

1,447,412

 

 

$

1,473,177

 

 

$

1,529,116

 

 

$

1,439,635

 

Less preferred stock

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

 

Less goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

Less intangible assets

 

18,217

 

 

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

Tangible common equity

$

990,849

 

 

$

990,732

 

 

$

1,015,170

 

 

$

1,069,678

 

 

$

1,050,443

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

12,994,787

 

 

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

Less goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

Less intangible assets

 

18,217

 

 

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

Tangible assets

$

12,611,406

 

 

$

12,699,814

 

 

$

13,320,750

 

 

$

13,149,908

 

 

$

12,498,824

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

7.86

%

 

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

 

Quarter Ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Sep 30,

2021

AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY

Average shareholder’s equity

$

1,494,504

 

 

$

1,474,267

 

 

$

1,394,096

 

Less average preferred stock

 

71,988

 

 

 

71,988

 

 

 

 

Less average goodwill

 

365,164

 

 

 

365,164

 

 

 

342,622

 

Less average intangible assets

 

18,857

 

 

 

20,175

 

 

 

23,473

 

Average tangible common equity

$

1,038,495

 

 

$

1,016,940

 

 

$

1,028,001

 

 

 

 

 

 

 

Net income available to common shareholders

$

49,263

 

 

$

44,211

 

 

$

13,913

 

Return on average tangible common equity

 

18.82

%

 

 

17.44

%

 

 

5.37

%

 

Quarter ended

 

Nine months ended

($ in thousands)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Sep 30,

2022

 

Sep 30,

2021

CALCULATION OF PRE-PROVISION NET REVENUE

 

 

 

 

Net interest income

$

124,290

 

 

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

335,068

 

 

$

258,134

 

Noninterest income

 

9,454

 

 

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

42,289

 

 

 

45,113

 

Less noninterest expense

 

68,843

 

 

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

197,067

 

 

 

182,225

 

Branch closure expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

 

3,441

 

Merger-related expenses

 

 

 

 

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

 

 

 

 

19,762

 

PPNR

$

64,901

 

 

$

58,383

 

 

$

57,006

 

 

$

63,316

 

 

$

56,119

 

 

$

180,290

 

 

$

144,225

 

 

��

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

13,158,121

 

 

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

 

$

13,431,863

 

 

$

10,860,756

 

ROAA - GAAP net income

 

1.51

%

 

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

 

 

1.42

%

 

 

1.01

%

PPNR ROAA - PPNR

 

1.96

%

 

 

1.73

%

 

 

1.70

%

 

 

1.89

%

 

 

1.81

%

 

 

1.79

%

 

 

1.78

%

 

Quarter Ended

($ in thousands, except per share data)

Sep 30,

2022

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

IMPACT OF PAYCHECK PROTECTION PROGRAM

Net income - GAAP

$

50,200

 

 

$

45,149

 

 

$

47,693

 

 

$

50,811

 

 

$

13,913

 

PPP interest and fee income

 

(471

)

 

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

Related tax effect

 

119

 

 

 

392

 

 

 

720

 

 

 

1,226

 

 

 

1,506

 

Adjusted net income - Non-GAAP

$

49,848

 

 

$

43,984

 

 

$

45,555

 

 

$

47,173

 

 

$

9,371

 

Preferred stock dividends

 

937

 

 

 

938

 

 

 

1,229

 

 

 

 

 

 

 

Adjusted net income available to common shareholders- Non-GAAP

$

48,911

 

 

$

43,046

 

 

$

44,326

 

 

$

47,173

 

 

$

9,371

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares

 

37,348

 

 

 

37,282

 

 

 

37,858

 

 

 

38,311

 

 

 

36,946

 

EPS - GAAP net income available to common shareholders

$

1.32

 

 

$

1.19

 

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

EPS - Adjusted net income available to common shareholders

$

1.31

 

 

$

1.15

 

 

$

1.17

 

 

$

1.23

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

Average Assets - GAAP

$

13,158,121

 

 

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

Average PPP loans, net

 

(26,113

)

 

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

Adjusted average assets - Non-GAAP

$

13,132,008

 

 

$

13,439,322

 

 

$

13,419,621

 

 

$

12,901,898

 

 

$

11,845,454

 

 

 

 

 

 

 

 

 

 

 

ROAA - GAAP net income

 

1.51

%

 

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

ROAA - Adjusted net income, adjusted average assets

 

1.51

%

 

 

1.31

%

 

 

1.38

%

 

 

1.45

%

 

 

0.31

%

 

 

 

 

 

 

 

 

 

 

PPNR - Non-GAAP (see reconciliation above)

$

64,901

 

 

$

58,383

 

 

$

57,006

 

 

$

63,316

 

 

$

56,119

 

PPP interest and fee income

 

(471

)

 

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

Adjusted PPNR - Non-GAAP

$

64,430

 

 

$

56,826

 

 

$

54,148

 

 

$

58,452

 

 

$

50,071

 

 

 

 

 

 

 

 

 

 

 

PPNR ROAA - PPNR

 

1.96

%

 

 

1.73

%

 

 

1.70

%

 

 

1.89

%

 

 

1.81

%

PPNR ROAA - adjusted PPNR, adjusted average assets

 

1.95

%

 

 

1.70

%

 

 

1.64

%

 

 

1.80

%

 

 

1.68

%

 

 

 

 

 

 

 

 

 

 

Tangible assets - Non-GAAP (see reconciliation above)

$

12,611,406

 

 

$

12,699,814

 

 

$

13,320,750

 

 

$

13,149,908

 

 

$

12,498,824

 

PPP loans outstanding, net

 

(13,165

)

 

 

(49,175

)

 

 

(134,084

)

 

 

(271,958

)

 

 

(438,959

)

Adjusted tangible assets - Non-GAAP

$

12,598,241

 

 

$

12,650,639

 

 

$

13,186,666

 

 

$

12,877,950

 

 

$

12,059,865

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity Non-GAAP (see reconciliation above)

$

990,849

 

 

$

990,732

 

 

$

1,015,170

 

 

$

1,069,678

 

 

$

1,050,443

 

Tangible common equity to tangible assets

 

7.86

%

 

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

Tangible common equity to tangible assets - adjusted tangible assets

 

7.86

%

 

 

7.83

%

 

 

7.70

%

 

 

8.31

%

 

 

8.71

%

 

 

 

 

 

 

 

 

 

 

Average assets for leverage ratio

$

12,918,632

 

 

$

13,265,790

 

 

$

13,273,520

 

 

$

12,915,944

 

 

$

11,972,171

 

Average PPP loans, net

 

(26,113

)

 

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

Adjusted average assets for leverage ratio - Non-GAAP

$

12,892,519

 

 

$

13,176,638

 

 

$

13,079,138

 

 

$

12,550,649

 

 

$

11,483,067

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital

$

1,340,252

 

 

$

1,295,791

 

 

$

1,271,342

 

 

$

1,257,462

 

 

$

1,166,529

 

Leverage ratio

 

10.4

%

 

 

9.8

%

 

 

9.6

%

 

 

9.7

%

 

 

9.7

%

Leverage ratio - adjusted average assets for leverage ratio

 

10.4

%

 

 

9.8

%

 

 

9.7

%

 

 

10.0

%

 

 

10.2

%

 

 

 

 

 

 

 

 

 

 

Net interest income - tax equivalent

$

126,144

 

 

$

111,312

 

 

$

102,671

 

 

$

103,567

 

 

$

98,573

 

PPP interest and fee income

 

(471

)

 

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

Adjusted net interest income - tax equivalent

$

125,673

 

 

$

109,755

 

 

$

99,813

 

 

$

98,703

 

 

$

92,525

 

 

 

 

 

 

 

 

 

 

 

Average earning assets - GAAP

$

12,198,251

 

 

$

12,579,211

 

 

$

12,711,116

 

 

$

12,373,149

 

 

$

11,513,279

 

Average PPP loans, net

 

(26,113

)

 

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

Adjusted average earning assets - Non-GAAP

$

12,172,138

 

 

$

12,490,059

 

 

$

12,516,734

 

 

$

12,007,854

 

 

$

11,024,175

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - tax equivalent

 

4.10

%

 

 

3.55

%

 

 

3.28

%

 

 

3.32

%

 

 

3.40

%

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

 

4.10

%

 

 

3.52

%

 

 

3.23

%

 

 

3.26

%

 

 

3.33

%

 

 

 

 

 

 

 

 

 

 

Loans - GAAP

$

9,354,987

 

 

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

PPP and other guaranteed loans, net

 

(924,605

)

 

 

(967,396

)

 

 

(1,023,509

)

 

 

(1,151,895

)

 

 

(1,277,452

)

Adjusted loans - Non-GAAP

$

8,430,382

 

 

$

8,301,780

 

 

$

8,032,564

 

 

$

7,865,747

 

 

$

7,839,131

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

$

140,572

 

 

$

140,546

 

 

$

139,212

 

 

$

145,041

 

 

$

152,096

 

Allowance for credit losses/loans - GAAP

 

1.50

%

 

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

Allowance for credit losses/loans - adjusted loans

 

1.67

%

 

 

1.69

%

 

 

1.73

%

 

 

1.84

%

 

 

1.94

%

 

Contacts

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

Media: Steve Richardson, Senior Vice President (314) 995-5695

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