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Enterprise Financial Reports Second Quarter 2022 Results

Second Quarter Results

  • Net income of $45.1 million, $1.19 per diluted common share
  • Net interest margin (tax equivalent) of 3.55%
  • Pre-provision return on average assets1 of 1.73%
  • Total loans2 of $9.2 billion, a quarterly increase of $298.0 million, or 13% annualized
  • Increased quarterly dividend 5% to $0.23 per common share for the third quarter
  • Repurchased 349,383 shares at an average price of $45.65 per share

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 second quarter earnings, “Our execution propelled double-digit loan growth on an annualized basis, building on the strong foundation that was established in the first quarter. Loan growth was diversified across our business lines and reflects the strength of the targeted investments we have made. Our organic growth, coupled with our well-positioned balance sheet, accelerated operating revenue which resulted in a nearly 18% return on average tangible common equity3 for the quarter. I am proud of what we have accomplished so far this year, as it demonstrates the power of the franchise we have built and expanded upon in recent years.”

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 second quarter 2022 was $45.1 million, a decrease of $2.5 million, compared to the linked quarter and an increase of $6.7 million from the prior year quarter. Earnings per share (“EPS”) was $1.19 per diluted common share for the second quarter 2022, compared to $1.23 per diluted common share for both the linked and prior year quarters, respectively.
  • Pre-provision net revenue1 (“PPNR”) - PPNR of $58.4 million in the second quarter 2022 increased $1.4 million and $10.9 million from the linked and prior year quarters, respectively. The increase from the linked quarter was primarily due to an increase in net interest income, partially offset by a decline in noninterest income and an increase in noninterest expense, as further discussed in the following sections. The increase from the prior year quarter was primarily due to the positive contribution from the First Choice acquisition and expansion in net interest income from organic loan and deposit growth.
  • Net interest income and net interest margin (“NIM”) - Net interest income of $109.6 million for the second quarter 2022 increased $8.4 million and $27.9 million from the linked and prior year quarters, respectively. NIM was 3.55% for the second quarter 2022, compared to 3.28% and 3.46% for the linked quarter and prior year quarter, respectively. Net interest income and NIM benefited from organic loan growth, a reallocation of excess liquidity into the investment portfolio and an increase in market interest rates.

1 Pre-provision return on average assets is a non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

2 Excludes PPP loans, which totaled $49.2 million at June 30, 2022.

3 Return on average tangible common equity is a non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

  • Noninterest income - Noninterest income of $14.2 million for the second quarter 2022 decreased $4.4 million and $2.0 million from the linked and prior year quarters, respectively. A decline in tax credit income from a seasonally strong first quarter and a decline in other income were the primary drivers of the linked quarter decrease. The decrease from the prior year quarter was primarily due to lower transactional income from private equity investments, a decrease in mortgage banking income and a decrease in gains on the sale of other real estate owned. These decreases were partially offset by deposit service charge income from the First Choice acquisition.
  • Loans - Total loans increased $213.1 million from the linked quarter to $9.3 billion as of June 30, 2022. PPP loans declined $84.9 million to $49.2 million. Excluding PPP loans, loans grew $298.0 million, or 13%, on an annualized basis from the linked quarter. Loan growth in the quarter was well distributed across geographic markets and the specialty lending niches. Average loans totaled $9.1 billion for the quarter ended June 30, 2022, compared to $9.0 billion and $7.3 billion for the linked and prior year quarters, respectively.
  • Asset quality - The allowance for credit losses to total loans was 1.52% at June 30, 2022, compared to 1.54% at March 31, 2022 and 1.77% at June 30, 2021. Nonperforming assets to total assets was 0.16% at June 30, 2022, compared to 0.17% and 0.44% at March 31, 2022 and June 30, 2021, respectively. A provision for credit losses of $0.7 million was recorded in the second quarter 2022 due to loan growth and changes in the macroeconomic forecasts, partially offset by an improvement in credit quality. Provision benefits of $4.1 million and $2.7 million were recorded in the linked and prior year quarters, respectively, primarily due to improvements in the macroeconomic forecasts.
  • Deposits - Total deposits decreased $611.5 million from the linked quarter to $11.1 billion as of June 30, 2022. The decline in deposits was concentrated in interest-bearing demand and money market accounts that were not relationship-based and reflects a shift in our deposit mix aligned with our disciplined focus on relationship-based, lower-cost deposits. Average deposits totaled $11.5 billion for both quarters ended June 30, 2022 and March 31, 2022, compared to $8.6 billion for the prior year quarter. Noninterest-bearing deposit accounts represented 42.8% of total deposits, and the loan to deposit ratio was 83.6% at June 30, 2022.
  • Capital - Total shareholders’ equity was $1.4 billion and the tangible common equity to tangible assets ratio4 was 7.8% at June 30, 2022, compared to 7.6% at March 31, 2022. Tangible common equity declined $24.4 million in the second quarter 2022, primarily due to a $49.2 million decrease in accumulated other comprehensive income driven mainly from a decrease in the fair value of the available-for-sale investment portfolio. The decrease in accumulated other comprehensive income was partially offset by the undistributed earnings in the second quarter 2022. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.0% and a total risk-based capital ratio of 13.1% as of June 30, 2022. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 10.9% and 14.2%, respectively, at June 30, 2022.

The Company repurchased 349,383 shares totaling $15.9 million in the second quarter 2022 for an average price of $45.65 per share. The shares acquired in the second quarter 2022 complete the share repurchase plan authorized by the Board of Directors on April 29, 2021. On May 4, 2022, the Board of Directors approved a new plan that authorized the repurchase of up to 2,000,000 shares of common stock. No shares have been repurchased under the recently-approved plan. In June 2022, the Company retired 1,980,093 shares of treasury stock and returned them to authorized and unissued shares.

4 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.

The Company’s Board of Directors approved a quarterly dividend of $0.23 per common share, payable on September 30, 2022 to shareholders of record as of September 15, 2022, an increase of $0.01, or 5%, compared to the second 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) June 15, 2022 to (but excluding) September 15, 2022. The dividend will be payable on September 15, 2022 to shareholders of record on August 31, 2022.

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

 

June 30, 2022

 

March 31, 2022

 

June 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans*

$

9,109,131

 

$

102,328

 

4.51

%

 

$

9,005,875

 

$

96,301

 

4.34

%

 

$

7,306,471

 

$

79,162

 

4.35

%

Securities*

 

2,068,119

 

 

12,944

 

2.51

 

 

 

1,923,969

 

 

10,969

 

2.31

 

 

 

1,502,582

 

 

9,226

 

2.46

 

Interest-earning deposits

 

1,401,961

 

 

2,496

 

0.71

 

 

 

1,781,272

 

 

817

 

0.19

 

 

 

806,928

 

 

237

 

0.12

 

Total interest-earning assets

 

12,579,211

 

 

117,768

 

3.76

 

 

 

12,711,116

 

 

108,087

 

3.45

 

 

 

9,615,981

 

 

88,625

 

3.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

949,263

 

 

 

 

 

 

902,887

 

 

 

 

 

 

665,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,528,474

 

 

 

 

 

$

13,614,003

 

 

 

 

 

$

10,281,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand accounts

$

2,329,431

 

$

659

 

0.11

%

 

$

2,505,319

 

$

536

 

0.09

%

 

$

1,985,811

 

$

336

 

0.07

%

Money market accounts

 

2,767,595

 

 

2,270

 

0.33

 

 

 

2,872,302

 

 

1,460

 

0.21

 

 

 

2,344,871

 

 

988

 

0.17

 

Savings

 

854,860

 

 

70

 

0.03

 

 

 

817,431

 

 

66

 

0.03

 

 

 

718,193

 

 

52

 

0.03

 

Certificates of deposit

 

591,091

 

 

851

 

0.58

 

 

 

607,133

 

 

797

 

0.53

 

 

 

522,633

 

 

1,091

 

0.84

 

Total interest-bearing deposits

 

6,542,977

 

 

3,850

 

0.24

 

 

 

6,802,185

 

 

2,859

 

0.17

 

 

 

5,571,508

 

 

2,467

 

0.18

 

Subordinated debentures

 

155,092

 

 

2,257

 

5.84

 

 

 

154,959

 

 

2,220

 

5.81

 

 

 

203,849

 

 

2,847

 

5.60

 

FHLB advances

 

50,000

 

 

197

 

1.58

 

 

 

50,000

 

 

195

 

1.58

 

 

 

50,000

 

 

197

 

1.58

 

Securities sold under agreements to repurchase

 

202,536

 

 

41

 

0.08

 

 

 

262,252

 

 

60

 

0.09

 

 

 

209,062

 

 

58

 

0.11

 

Other borrowings

 

21,414

 

 

111

 

2.08

 

 

 

22,841

 

 

82

 

1.46

 

 

 

27,147

 

 

94

 

1.39

 

Total interest-bearing liabilities

 

6,972,019

 

 

6,456

 

0.37

 

 

 

7,292,237

 

 

5,416

 

0.30

 

 

 

6,061,566

 

 

5,663

 

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

4,987,455

 

 

 

 

 

 

4,692,027

 

 

 

 

 

 

3,008,703

 

 

 

 

Other liabilities

 

94,733

 

 

 

 

 

 

93,518

 

 

 

 

 

 

94,106

 

 

 

 

Total liabilities

 

12,054,207

 

 

 

 

 

 

12,077,782

 

 

 

 

 

 

9,164,375

 

 

 

 

Shareholders' equity

 

1,474,267

 

 

 

 

 

 

1,536,221

 

 

 

 

 

 

1,116,969

 

 

 

 

Total liabilities and shareholders' equity

$

13,528,474

 

 

 

 

 

$

13,614,003

 

 

 

 

 

$

10,281,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

111,312

 

 

 

 

 

$

102,671

 

 

 

 

 

$

82,962

 

 

Net interest margin

 

 

 

 

3.55

%

 

 

 

 

 

3.28

%

 

 

 

 

 

3.46

%

* Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $1.7 million, $1.5 million, and $1.2 million for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

NIM, on a tax equivalent basis, was 3.55% in the second quarter 2022, an increase of 27 basis points from the linked quarter and an increase of nine basis points from the prior year quarter. The increase in NIM from the linked quarter was primarily due to higher yields on loans, investments and interest-earning deposits due to an increase in market interest rates, including a 125 basis point increase in the federal funds rate. The average loan yield was 4.51% in the second quarter 2022, an increase of 17 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 4.71% (as of June 30, 2022). Approximately 20% of the variable-rate loan portfolio reprices on the first day of each quarter and did not increase with the current quarter’s rate movement, but these loan rates will reset early in the third quarter. The average investment yield was 2.51%, an increase of 20 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. Investments purchased in the second quarter 2022 had a tax equivalent average yield of 2.99%.

The effective federal funds rate for the second quarter 2022 was 76 basis points, an increase of 64 basis points, compared to the linked quarter and a 69 basis point increase over the prior year quarter. Concurrently, the Company’s earning asset yield increased 31 basis points, while the interest-bearing liability yield increased seven basis points, compared to the linked quarter. The total cost of deposits, including noninterest-bearing demand accounts, increased three basis points during the second quarter 2022.

Net interest income for the second quarter was $109.6 million, an increase of $8.4 million from the linked quarter, and an increase of $27.9 million from the prior year period. The increase in net interest income from the linked quarter was primarily due to an increase in the earning asset yield due to an increase in interest rates that was further enhanced by a stronger earning asset mix. The Company continued to redeploy part of its excess liquidity into the investment portfolio during the second quarter, increasing investments $244.2 million, when excluding mark-to-market fluctuations. Net interest income was also impacted by a decline in PPP income, a decline in interest-earning deposit accounts and the related interest income, and an increase in interest expense.

Loans

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

 

Quarter ended

 

 

 

 

 

 

 

September 30, 2021

 

 

($ in thousands)

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

FCBPa

 

Legacy

EFSCa

 

Consolidated

 

June 30,

2021

C&I

$

1,702,081

 

 

$

1,498,151

 

 

$

1,538,155

 

 

$

242,740

 

$

1,215,338

 

$

1,458,078

 

 

$

1,116,229

 

CRE investor owned

 

1,977,806

 

 

 

1,982,645

 

 

 

1,955,087

 

 

 

553,490

 

 

1,381,794

 

 

1,935,284

 

 

 

1,467,243

 

CRE owner occupied

 

1,118,895

 

 

 

1,138,106

 

 

 

1,112,463

 

 

 

301,929

 

 

861,307

 

 

1,163,236

 

 

 

789,220

 

SBA loans*

 

1,284,279

 

 

 

1,249,929

 

 

 

1,241,449

 

 

 

160,833

 

 

1,038,925

 

 

1,199,758

 

 

 

1,010,727

 

Sponsor finance*

 

647,180

 

 

 

641,476

 

 

 

508,469

 

 

 

 

 

454,431

 

 

454,431

 

 

 

463,744

 

Life insurance premium financing*

 

688,035

 

 

 

636,096

 

 

 

593,562

 

 

 

 

 

572,492

 

 

572,492

 

 

 

564,366

 

Tax credits*

 

550,662

 

 

 

518,020

 

 

 

486,881

 

 

 

 

 

462,168

 

 

462,168

 

 

 

423,258

 

SBA PPP loans

 

49,175

 

 

 

134,084

 

 

 

271,958

 

 

 

206,284

 

 

232,675

 

 

438,959

 

 

 

396,660

 

Residential real estate

 

391,867

 

 

 

410,173

 

 

 

430,985

 

 

 

226,321

 

 

293,538

 

 

519,859

 

 

 

302,007

 

Construction and land development

 

626,577

 

 

 

610,830

 

 

 

625,526

 

 

 

219,600

 

 

432,627

 

 

652,227

 

 

 

467,586

 

Other

 

232,619

 

 

 

236,563

 

 

 

253,107

 

 

 

32,547

 

 

227,544

 

 

260,091

 

 

 

225,227

 

Total loans

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

1,943,744

 

$

7,172,839

 

$

9,116,583

 

 

$

7,226,267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan yield

 

4.51

%

 

 

4.34

%

 

 

4.32

%

 

 

 

 

 

 

4.32

%

 

 

4.35

%

Variable interest rate loans to total loans

 

64

%

 

 

63

%

 

 

63

%

 

 

 

 

 

 

63

%

 

 

60

%

*Specialty loan category

a Amounts reported are as of September 30, 2021 and are separately shown attributable to the FCBP loan portfolio acquired on July 21, 2021, and the Company’s pre-FCBP acquisition loan portfolio.

Loans totaled $9.3 billion at June 30, 2022, increasing $213.1 million, compared to the linked quarter. PPP loans declined $84.9 million in the second quarter 2022 to $49.2 million from continued loan forgiveness by the Small Business Administration (“SBA”). Excluding PPP loans, loans grew $298.0 million, or 13% on an annualized basis, from the linked quarter. The increase was driven by the specialty lending categories noted in the table above, increasing $124.6 million, as well as growth in nearly all geographic markets in the second quarter 2022. Average line utilization was approximately 44% for the quarter ended June 30, 2022, compared to 40% and 39% for the linked and prior year quarters, respectively. This trend added approximately $152 million to loans outstanding during the current quarter.

Asset Quality

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

 

Quarter ended

($ in thousands)

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

Nonperforming loans*

$

19,560

 

 

$

21,160

 

 

$

28,024

 

 

$

41,554

 

 

$

42,252

 

Other real estate

 

955

 

 

 

1,459

 

 

 

3,493

 

 

 

3,493

 

 

 

3,612

 

Nonperforming assets*

$

20,515

 

 

$

22,619

 

 

$

31,517

 

 

$

45,047

 

 

$

45,864

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

0.21

%

 

 

0.23

%

 

 

0.31

%

 

 

0.46

%

 

 

0.58

%

Nonperforming assets to total assets

 

0.16

%

 

 

0.17

%

 

 

0.23

%

 

 

0.35

%

 

 

0.44

%

Allowance for credit losses to total loans

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

 

 

1.77

%

Net charge-offs (recoveries)

$

(175

)

 

$

1,521

 

 

$

3,263

 

 

$

1,850

 

 

$

869

 

 

 

 

 

 

 

 

 

 

 

*Guaranteed balances excluded

$

6,063

 

 

$

3,954

 

 

$

6,481

 

 

$

5,109

 

 

$

3,930

 

Nonperforming assets declined $2.1 million during the second quarter 2022 and $25.3 million from the prior year quarter. During the second quarter the Company experienced one basis point of net recoveries relative to average loans, compared to seven basis points of net charge-offs in the linked quarter and five basis points of net charge-offs in the prior year quarter. The Company recorded a provision for credit losses of $0.7 million for the second quarter 2022, compared to a benefit of $4.1 million for the linked quarter and a benefit of $2.7 million for the prior year quarter. Allowance for credit losses to total loans was 1.52% at June 30, 2022, a decrease of two basis points from the linked quarter. This trend was due to continued improvement in asset quality and net recovery activity, while loan growth and a decline in forecasted macroeconomic factors warranted additions to the allowance for credit losses.

Deposits

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

 

Quarter ended

 

 

 

 

 

 

 

September 30, 2021

 

 

($ in thousands)

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

FCBPa

 

Legacy

EFSCa

 

Consolidated

 

June 30,

2021

Noninterest-bearing demand accounts

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

1,041,622

 

 

$

3,334,091

 

 

$

4,375,713

 

 

$

3,111,581

 

Interest-bearing demand accounts

 

2,197,957

 

 

 

2,547,482

 

 

 

2,465,884

 

 

 

317,301

 

 

 

1,936,338

 

 

 

2,253,639

 

 

 

2,013,129

 

Money market and savings accounts

 

3,562,982

 

 

 

3,678,135

 

 

 

3,691,186

 

 

 

370,179

 

 

 

3,201,073

 

 

 

3,571,252

 

 

 

3,000,460

 

Brokered certificates of deposit

 

129,064

 

 

 

129,017

 

 

 

128,970

 

 

 

78,714

 

 

 

50,209

 

 

 

128,923

 

 

 

50,209

 

Other certificates of deposit

 

456,137

 

 

 

468,458

 

 

 

479,323

 

 

 

51,832

 

 

 

446,416

 

 

 

498,248

 

 

 

464,125

 

Total deposit portfolio

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

1,859,648

 

 

$

8,968,127

 

 

$

10,827,775

 

 

$

8,639,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits to total deposits

 

42.8

%

 

 

41.7

%

 

 

40.4

%

 

 

56.0

%

 

 

37.2

%

 

 

40.4

%

 

 

36.0

%

aAmounts reported are as of September 30, 2021 and are shown separately attributable to the FCBP deposit portfolio acquired on July 21, 2021, and the Company’s pre-FCBP acquisition deposit portfolio.

Total deposits at June 30, 2022 were $11.1 billion, a decrease of $611.5 million from March 31, 2022, and an increase of $2.5 billion from June 30, 2021. Noninterest-bearing deposits declined $134.6 million from the linked quarter due primarily to managing out one large client in the deposit specialty portfolio that was partially mitigated by growth from other client activity. The $464.7 million decrease in interest-bearing demand and money market accounts from the linked quarter was primarily due to the managed run-off of certain interest-rate sensitive, large balance accounts and reflects a shift in our deposit mix aligned with our disciplined focus on relationship-based, lower-cost deposits. These customers were single service customers and were not part of broader banking relationships. The increase compared to the prior year is due to the First Choice acquisition coupled with organic growth.

The total cost of deposits was 0.13% for the current quarter, compared to 0.10% for the linked quarter and 0.12% 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)

June 30,

2022

 

March 31,

2022

 

Increase (decrease)

 

June 30,

2021

 

Increase (decrease)

Deposit service charges

$

4,749

 

$

4,163

 

$

586

 

 

14

%

 

$

3,862

 

$

887

 

 

23

%

Wealth management revenue

 

2,533

 

 

2,622

 

 

(89

)

 

(3

) %

 

 

2,516

 

 

17

 

 

1

%

Card services revenue

 

3,514

 

 

3,040

 

 

474

 

 

16

%

 

 

2,975

 

 

539

 

 

18

%

Tax credit income

 

1,186

 

 

2,608

 

 

(1,422

)

 

(55

) %

 

 

1,370

 

 

(184

)

 

(13

) %

Other income

 

2,212

 

 

6,208

 

 

(3,996

)

 

(64

) %

 

 

5,481

 

 

(3,269

)

 

(60

) %

Total noninterest income

$

14,194

 

$

18,641

 

$

(4,447

)

 

(24

) %

 

$

16,204

 

$

(2,010

)

 

(12

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income for the second quarter 2022 was $14.2 million, a decrease of $4.4 million from the linked quarter and a decrease of $2.0 million from the prior year quarter. The decrease from the linked quarter was primarily due to decreases in tax credit and other income. Tax credit income is typically higher in the fourth and first quarter of each year and experiences a seasonal decline during the second and third quarter. Rising interest rates also reduced tax credit income due to the impact on tax credit projects carried at fair value.

 

Linked quarter comparison

 

Prior year comparison

 

Quarter ended

 

Quarter ended

($ in thousands)

June 30,

2022

 

March 31,

2022

 

Increase (decrease)

 

June 30,

2021

 

Increase (decrease)

BOLI

$

748

 

$

1,034

 

$

(286

)

 

(28

) %

 

$

728

 

$

20

 

 

3

%

Community development investments

 

193

 

 

2,166

 

 

(1,973

)

 

(91

) %

 

 

147

 

 

46

 

 

31

%

Mortgage banking

 

43

 

 

294

 

 

(251

)

 

(85

) %

 

 

773

 

 

(730

)

 

(94

) %

Private equity fund distribution

 

240

 

 

188

 

 

52

 

 

28

%

 

 

2,015

 

 

(1,775

)

 

(88

) %

Servicing fees

 

165

 

 

658

 

 

(493

)

 

(75

) %

 

 

476

 

 

(311

)

 

(65

) %

Swap fees

 

102

 

 

1,156

 

 

(1,054

)

 

(91

) %

 

 

21

 

 

81

 

 

386

%

Miscellaneous income

 

721

 

 

712

 

 

9

 

 

1

%

 

 

1,321

 

 

(600

)

 

(45

) %

Total other income

$

2,212

 

$

6,208

 

$

(3,996

)

 

(64

) %

 

$

5,481

 

$

(3,269

)

 

(60

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income in the linked quarter included $2.2 million of fees from community development investments and $1.2 million of swap income, compared to $0.3 million in the second quarter 2022 in these categories. The decrease from the prior year quarter was primarily due to a decline in transactional private equity distributions and a decline in mortgage banking revenue. These decreases were partially offset by First Choice noninterest income that contributed to the increase in deposit service charges on a year-over-year basis.

 

Linked quarter comparison

 

Prior year comparison

 

Quarter ended

 

Quarter ended

($ in thousands)

June 30,

2022

 

March 31,

2022

 

Increase (decrease)

 

June 30,

2021

 

Increase (decrease)

Employee compensation and benefits

$

36,028

 

$

35,827

 

$

201

 

 

1

%

 

$

28,132

 

$

7,896

 

 

28

%

Occupancy

 

4,309

 

 

4,586

 

 

(277

)

 

(6

) %

 

 

3,529

 

 

780

 

 

22

%

Merger-related expenses

 

 

 

 

 

 

 

%

 

 

1,949

 

 

(1,949

)

 

(100

) %

Other expense

 

25,087

 

 

22,387

 

 

2,700

 

 

12

%

 

 

18,846

 

 

6,241

 

 

33

%

Total noninterest expense

$

65,424

 

$

62,800

 

$

2,624

 

 

4

%

 

$

52,456

 

$

12,968

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense was $65.4 million for the second quarter 2022, compared to $62.8 million for the linked quarter, and $52.5 million for the prior year quarter. Employee compensation and benefits increased $0.2 million from the linked quarter, which included a $1.2 million increase in ongoing compensation expense that was offset by a $1.2 million decline in payroll taxes. The compensation trend in the linked quarter was primarily driven by performance-based incentive accruals. Other expense increased $2.7 million from the linked quarter primarily due to a $1.6 million increase in deposit costs and a $0.8 million increase in loan and legal expenses due to growth in the loan portfolio. The increase from the prior year quarter was primarily due to the First Choice acquisition, merit increases provided to employees throughout 2021 and 2022 and an increase in deposit costs due to higher average balances and interest-rate trends.

For the second quarter 2022, the Company’s efficiency ratio was 52.8%, compared to 52.4% and 53.6% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio5 was 52.8% for the quarter ended June 30, 2022, compared to 52.4% for the linked quarter and 51.9% for the prior year quarter.

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

Income Taxes

The Company’s effective tax rate was 22% for both the quarter ended June 30 and March 31, 2022, compared to 20% for the prior year quarter. The Company’s effective tax rate has increased due to growth of pre-tax income and the further expansion and diversification of the Company’s geographic footprint which affected state tax apportionment.

Capital

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

 

Quarter ended

Percent

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

Total risk-based capital to risk-weighted assets

14.2

%

 

14.4

%

 

14.7

%

 

14.5

%

 

14.9

%

Tier 1 capital to risk weighted assets

12.5

%

 

12.7

%

 

13.0

%

 

12.2

%

 

12.3

%

Common equity tier 1 capital to risk-weighted assets

10.9

%

 

11.0

%

 

11.3

%

 

11.2

%

 

11.1

%

Tangible common equity to tangible assets

7.8

%

 

7.6

%

 

8.1

%

 

8.4

%

 

8.3

%

Leverage ratio

9.8

%

 

9.6

%

 

9.7

%

 

9.7

%

 

9.4

%

Total equity was $1.4 billion at June 30, 2022, a decrease of $25.8 million from the linked quarter. The decrease from the linked quarter was primarily due to a $49.2 million decline in accumulated other comprehensive income, $15.9 million in share repurchases, and $9.1 million in common and preferred dividends. These decreases were partially offset by current period net income of $45.1 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 $26.63 at June 30, 2022, compared to $27.06 and $26.85 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, 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, July 26, 2022. During the call, management will review the second 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/EFSC2Q2022 and register to receive a dial in number, passcode, and pin number. The replay will be available for approximately two weeks following the conference call.

About Enterprise Financial Services Corp

Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.1 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, 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

 

Six months ended

(in thousands, except per share data)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

 

Jun 30,

2022

 

Jun 30,

2021

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

81,738

 

 

$

210,778

 

 

$

160,861

 

Provision (benefit) for credit losses

 

658

 

 

 

(4,068

)

 

 

(3,660

)

 

 

19,668

 

 

 

(2,669

)

 

 

(3,410

)

 

 

(2,623

)

Noninterest income

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

16,204

 

 

 

32,835

 

 

 

27,494

 

Noninterest expense

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

52,456

 

 

 

128,224

 

 

 

105,340

 

Income before income tax expense

 

57,725

 

 

 

61,074

 

 

 

64,656

 

 

 

18,339

 

 

 

48,155

 

 

 

118,799

 

 

 

85,638

 

Income tax expense

 

12,576

 

 

 

13,381

 

 

 

13,845

 

 

 

4,426

 

 

 

9,750

 

 

 

25,957

 

 

 

17,307

 

Net income

 

45,149

 

 

 

47,693

 

 

 

50,811

 

 

 

13,913

 

 

 

38,405

 

 

 

92,842

 

 

 

68,331

 

Preferred stock dividends

 

938

 

 

 

1,229

 

 

 

 

 

 

 

 

 

 

 

 

2,167

 

 

 

 

Net income available to common shareholders

$

44,211

 

 

$

46,464

 

 

$

50,811

 

 

$

13,913

 

 

$

38,405

 

 

$

90,675

 

 

$

68,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.19

 

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

 

$

1.23

 

 

$

2.41

 

 

$

2.18

 

Return on average assets

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

 

 

1.50

%

 

 

1.38

%

 

 

1.36

%

Return on average common equity

 

12.65

%

 

 

12.87

%

 

 

13.81

%

 

 

3.96

%

 

 

13.79

%

 

 

12.76

%

 

 

12.45

%

Return on average tangible common equity1

 

17.44

%

 

 

17.49

%

 

 

18.81

%

 

 

5.37

%

 

 

18.44

%

 

 

17.46

%

 

 

16.71

%

Net interest margin (tax equivalent)

 

3.55

%

 

 

3.28

%

 

 

3.32

%

 

 

3.40

%

 

 

3.46

%

 

 

3.41

%

 

 

3.48

%

Efficiency ratio

 

52.84

%

 

 

52.42

%

 

 

51.08

%

 

 

66.92

%

 

 

53.56

%

 

 

52.63

%

 

 

55.93

%

Core efficiency ratio1

 

52.81

%

 

 

52.43

%

 

 

49.22

%

 

 

51.30

%

 

 

51.86

%

 

 

52.62

%

 

 

53.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

$

7,226,267

 

 

 

 

 

Average loans

$

9,109,131

 

 

$

9,005,875

 

 

$

9,030,982

 

 

$

8,666,353

 

 

$

7,306,471

 

 

$

9,057,788

 

 

$

7,249,938

 

Assets

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

$

10,346,993

 

 

 

 

 

Average assets

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

 

$

10,281,344

 

 

$

13,571,002

 

 

$

10,111,641

 

Deposits

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

10,827,775

 

 

$

8,639,504

 

 

 

 

 

Average deposits

$

11,530,432

 

 

$

11,494,212

 

 

$

11,167,003

 

 

$

10,297,153

 

 

$

8,580,211

 

 

$

11,512,422

 

 

$

8,394,825

 

Period end common shares outstanding

 

37,206

 

 

 

37,516

 

 

 

37,820

 

 

 

38,372

 

 

 

31,185

 

 

 

 

 

Dividends per common share

$

0.22

 

 

$

0.21

 

 

$

0.20

 

 

$

0.19

 

 

$

0.18

 

 

$

0.43

 

 

$

0.36

 

Tangible book value per common share

$

26.63

 

 

$

27.06

 

 

$

28.28

 

 

$

27.38

 

 

$

26.85

 

 

 

 

 

Tangible common equity to tangible assets1

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

 

 

8.32

%

 

 

 

 

Total risk-based capital to risk-weighted assets

 

14.2

%

 

 

14.4

%

 

 

14.7

%

 

 

14.5

%

 

 

14.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Six months ended

($ in thousands, except per share data)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

 

Jun 30,

2022

 

Jun 30,

2021

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

116,069

 

$

106,581

 

 

$

107,641

 

 

$

103,228

 

$

87,401

 

 

$

222,650

 

 

$

172,361

 

Interest expense

 

6,456

 

 

5,416

 

 

 

5,581

 

 

 

5,955

 

 

5,663

 

 

 

11,872

 

 

 

11,500

 

Net interest income

 

109,613

 

 

101,165

 

 

 

102,060

 

 

 

97,273

 

 

81,738

 

 

 

210,778

 

 

 

160,861

 

Provision (benefit) for credit losses

 

658

 

 

(4,068

)

 

 

(3,660

)

 

 

19,668

 

 

(2,669

)

 

 

(3,410

)

 

 

(2,623

)

Net interest income after provision for credit losses

 

108,955

 

 

105,233

 

 

 

105,720

 

 

 

77,605

 

 

84,407

 

 

 

214,188

 

 

 

163,484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit service charges

 

4,749

 

 

4,163

 

 

 

3,962

 

 

 

4,520

 

 

3,862

 

 

 

8,912

 

 

 

6,946

 

Wealth management revenue

 

2,533

 

 

2,622

 

 

 

2,687

 

 

 

2,573

 

 

2,516

 

 

 

5,155

 

 

 

4,999

 

Card services revenue

 

3,514

 

 

3,040

 

 

 

3,223

 

 

 

3,186

 

 

2,975

 

 

 

6,554

 

 

 

5,471

 

Tax credit income

 

1,186

 

 

2,608

 

 

 

4,374

 

 

 

3,325

 

 

1,370

 

 

 

3,794

 

 

 

329

 

Other income

 

2,212

 

 

6,208

 

 

 

8,384

 

 

 

4,015

 

 

5,481

 

 

 

8,420

 

 

 

9,749

 

Total noninterest income

 

14,194

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

16,204

 

 

 

32,835

 

 

 

27,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

36,028

 

 

35,827

 

 

 

33,488

 

 

 

33,722

 

 

28,132

 

 

 

71,855

 

 

 

57,694

 

Occupancy

 

4,309

 

 

4,586

 

 

 

4,510

 

 

 

4,496

 

 

3,529

 

 

 

8,895

 

 

 

7,280

 

Branch closure expenses

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

 

 

 

 

Merger-related expenses

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

1,949

 

 

 

 

 

 

5,091

 

Other expense

 

25,087

 

 

22,387

 

 

 

23,376

 

 

 

20,555

 

 

18,846

 

 

 

47,474

 

 

 

35,275

 

Total noninterest expense

 

65,424

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

52,456

 

 

 

128,224

 

 

 

105,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

57,725

 

 

61,074

 

 

 

64,656

 

 

 

18,339

 

 

48,155

 

 

 

118,799

 

 

 

85,638

 

Income tax expense

 

12,576

 

 

13,381

 

 

 

13,845

 

 

 

4,426

 

 

9,750

 

 

 

25,957

 

 

 

17,307

 

Net income

$

45,149

 

$

47,693

 

 

$

50,811

 

 

$

13,913

 

$

38,405

 

 

$

92,842

 

 

$

68,331

 

Preferred stock dividends

 

938

 

 

1,229

 

 

 

 

 

 

 

 

 

 

 

2,167

 

 

 

 

Net income available to common shareholders

$

44,211

 

$

46,464

 

 

$

50,811

��

 

$

13,913

 

$

38,405

 

 

$

90,675

 

 

$

68,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.19

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

$

1.23

 

 

$

2.42

 

 

$

2.19

 

Diluted earnings per common share

$

1.19

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

$

1.23

 

 

$

2.41

 

 

$

2.18

 

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

271,763

 

 

$

252,706

 

 

$

209,177

 

 

$

179,826

 

 

$

126,789

 

Interest-earning deposits

 

680,343

 

 

 

1,735,708

 

 

 

1,819,508

 

 

 

1,216,470

 

 

 

889,960

 

Debt and equity investments

 

2,172,318

 

 

 

1,993,927

 

 

 

1,855,583

 

 

 

1,717,442

 

 

 

1,585,847

 

Loans held for sale

 

4,615

 

 

 

4,270

 

 

 

6,389

 

 

 

5,068

 

 

 

5,763

 

 

 

 

 

 

 

 

 

 

 

Loans

 

9,269,176

 

 

 

9,056,073

 

 

 

9,017,642

 

 

 

9,116,583

 

 

 

7,226,267

 

Allowance for credit losses

 

(140,546

)

 

 

(139,212

)

 

 

(145,041

)

 

 

(152,096

)

 

 

(128,185

)

Total loans, net

 

9,128,630

 

 

 

8,916,861

 

 

 

8,872,601

 

 

 

8,964,487

 

 

 

7,098,082

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

46,028

 

 

 

46,900

 

 

 

47,915

 

 

 

48,697

 

 

 

50,972

 

Goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

 

 

260,567

 

Intangible assets, net

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

 

 

20,358

 

Other assets

 

396,117

 

 

 

370,378

 

 

 

338,735

 

 

 

366,834

 

 

 

308,655

 

Total assets

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

$

10,346,993

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

4,375,713

 

 

$

3,111,581

 

Interest-bearing deposits

 

6,346,140

 

 

 

6,823,092

 

 

 

6,765,363

 

 

 

6,452,062

 

 

 

5,527,923

 

Total deposits

 

11,092,618

 

 

 

11,704,135

 

 

 

11,343,799

 

 

 

10,827,775

 

 

 

8,639,504

 

Subordinated debentures

 

155,164

 

 

 

155,031

 

 

 

154,899

 

 

 

204,103

 

 

 

203,940

 

FHLB advances

 

50,000

 

 

 

50,000

 

 

 

50,000

 

 

 

50,000

 

 

 

50,000

 

Other borrowings

 

226,695

 

 

 

228,846

 

 

 

353,863

 

 

 

243,770

 

 

 

234,509

 

Other liabilities

 

112,617

 

 

 

95,580

 

 

 

105,681

 

 

 

122,733

 

 

 

100,739

 

Total liabilities

 

11,637,094

 

 

 

12,233,592

 

 

 

12,008,242

 

 

 

11,448,381

 

 

 

9,228,692

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

 

 

 

 

Common stock

 

372

 

 

 

395

 

 

 

398

 

 

 

404

 

 

 

330

 

Treasury stock

 

 

 

 

(73,528

)

 

 

(73,528

)

 

 

(73,528

)

 

 

(73,528

)

Additional paid-in capital

 

976,684

 

 

 

1,010,446

 

 

 

1,018,799

 

 

 

1,031,146

 

 

 

688,945

 

Retained earnings

 

506,849

 

 

 

523,136

 

 

 

492,682

 

 

 

461,711

 

 

 

474,282

 

Accumulated other comprehensive income (loss)

 

(108,481

)

 

 

(59,260

)

 

 

18,777

 

 

 

19,902

 

 

 

28,272

 

Total shareholders’ equity

 

1,447,412

 

 

 

1,473,177

 

 

 

1,529,116

 

 

 

1,439,635

 

 

 

1,118,301

 

Total liabilities and shareholders’ equity

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

$

10,346,993

 

 

Six months ended

 

June 30, 2022

 

June 30, 2021

($ in thousands)

Average

Balance

 

Interest

Income/

Expense

 

Average Yield/ Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Average Yield/ Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans*

$

9,057,788

 

$

198,629

 

4.42

%

 

$

7,249,938

 

$

156,234

 

4.35

%

Securities*

 

1,996,442

 

 

23,913

 

2.42

 

 

 

1,460,179

 

 

18,044

 

2.49

 

Interest-earning deposits

 

1,590,569

 

 

3,313

 

0.42

 

 

 

743,645

 

 

426

 

0.12

 

Total interest-earning assets

 

12,644,799

 

 

225,855

 

3.60

 

 

 

9,453,762

 

 

174,704

 

3.73

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

926,203

 

 

 

 

 

 

657,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,571,002

 

 

 

 

 

$

10,111,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand accounts

$

2,416,889

 

$

1,194

 

0.10

%

 

$

1,936,707

 

$

664

 

0.07

%

Money market accounts

 

2,819,659

 

 

3,730

 

0.27

 

 

 

2,347,716

 

 

1,963

 

0.17

 

Savings

 

836,249

 

 

137

 

0.03

 

 

 

686,603

 

 

100

 

0.03

 

Certificates of deposit

 

599,067

 

 

1,648

 

0.55

 

 

 

529,860

 

 

2,403

 

0.91

 

Total interest-bearing deposits

 

6,671,864

 

 

6,709

 

0.20

 

 

 

5,500,886

 

 

5,130

 

0.19

 

Subordinated debentures

 

155,026

 

 

4,477

 

5.82

 

 

 

203,772

 

 

5,666

 

5.61

 

FHLB advances

 

50,000

 

 

392

 

1.58

 

 

 

50,000

 

 

392

 

1.58

 

Securities sold under agreements to repurchase

 

232,229

 

 

101

 

0.09

 

 

 

220,233

 

 

118

 

0.11

 

Other borrowings

 

22,123

 

 

193

 

1.76

 

 

 

27,894

 

 

194

 

1.40

 

Total interest-bearing liabilities

 

7,131,242

 

 

11,872

 

0.34

 

 

 

6,002,785

 

 

11,500

 

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

4,840,558

 

 

 

 

 

 

2,893,939

 

 

 

 

Other liabilities

 

94,129

 

 

 

 

 

 

108,135

 

 

 

 

Total liabilities

 

12,065,929

 

 

 

 

 

 

9,004,859

 

 

 

 

Shareholders' equity

 

1,505,073

 

 

 

 

 

 

1,106,782

 

 

 

 

Total liabilities and shareholders' equity

$

13,571,002

 

 

 

 

 

$

10,111,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net interest income

 

 

$

213,983

 

 

 

 

 

$

163,204

 

 

Net interest margin

 

 

 

 

3.41

%

 

 

 

 

 

3.48

%

* Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $3.2 million and $2.3 million for the six months ended June 30, 2022 and 2021, respectively.

ENTERPRISE FINANCIAL SERVICES CORP

CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

 

 

Quarter ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

LOAN PORTFOLIO

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

3,596,701

 

 

$

3,398,723

 

 

$

3,392,375

 

 

$

3,379,171

 

 

$

2,930,805

 

Commercial real estate

 

4,294,375

 

 

 

4,278,138

 

 

 

4,176,928

 

 

 

4,179,712

 

 

 

3,200,748

 

Construction real estate

 

724,163

 

 

 

702,630

 

 

 

734,073

 

 

 

747,758

 

 

 

556,776

 

Residential real estate

 

413,727

 

 

 

432,639

 

 

 

454,052

 

 

 

542,690

 

 

 

305,497

 

Other

 

240,210

 

 

 

243,943

 

 

 

260,214

 

 

 

267,252

 

 

 

232,441

 

Total loans

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

$

7,226,267

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT PORTFOLIO

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand accounts

$

4,746,478

 

 

$

4,881,043

 

 

$

4,578,436

 

 

$

4,375,713

 

 

$

3,111,581

 

Interest-bearing demand accounts

 

2,197,957

 

 

 

2,547,482

 

 

 

2,465,884

 

 

 

2,253,639

 

 

 

2,013,129

 

Money market and savings accounts

 

3,562,982

 

 

 

3,678,135

 

 

 

3,691,186

 

 

 

3,571,252

 

 

 

3,000,460

 

Brokered certificates of deposit

 

129,064

 

 

 

129,017

 

 

 

128,970

 

 

 

128,923

 

 

 

50,209

 

Other certificates of deposit

 

456,137

 

 

 

468,458

 

 

 

479,323

 

 

 

498,248

 

 

 

464,125

 

Total deposits

$

11,092,618

 

 

$

11,704,135

 

 

$

11,343,799

 

 

$

10,827,775

 

 

$

8,639,504

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

Loans

$

9,109,131

 

 

$

9,005,875

 

 

$

9,030,982

 

 

$

8,666,353

 

 

$

7,306,471

 

Debt and equity investments

 

2,068,119

 

 

 

1,923,969

 

 

 

1,753,159

 

 

 

1,594,938

 

 

 

1,502,582

 

Interest-earning assets

 

12,579,211

 

 

 

12,711,116

 

 

 

12,373,149

 

 

 

11,513,279

 

 

 

9,615,981

 

Assets

 

13,528,474

 

 

 

13,614,003

 

 

 

13,267,193

 

 

 

12,334,558

 

 

 

10,281,344

 

Deposits

 

11,530,432

 

 

 

11,494,212

 

 

 

11,167,003

 

 

 

10,297,153

 

 

 

8,580,211

 

Shareholders’ equity

 

1,474,267

 

 

 

1,536,221

 

 

 

1,495,396

 

 

 

1,394,096

 

 

 

1,116,969

 

Tangible common equity1

 

1,016,940

 

 

 

1,077,529

 

 

 

1,071,902

 

 

 

1,028,001

 

 

 

835,405

 

 

 

 

 

 

 

 

 

 

 

YIELDS (tax equivalent)

 

 

 

 

 

 

 

 

 

Loans

 

4.51

%

 

 

4.34

%

 

 

4.32

%

 

 

4.32

%

 

 

4.35

%

Debt and equity investments

 

2.51

 

 

 

2.31

 

 

 

2.30

 

 

 

2.38

 

 

 

2.46

 

Interest-earning assets

 

3.76

 

 

 

3.45

 

 

 

3.50

 

 

 

3.60

 

 

 

3.70

 

Interest-bearing deposits

 

0.24

 

 

 

0.17

 

 

 

0.17

 

 

 

0.17

 

 

 

0.18

 

Deposits

 

0.13

 

 

 

0.10

 

 

 

0.10

 

 

 

0.11

 

 

 

0.12

 

Subordinated debentures

 

5.84

 

 

 

5.81

 

 

 

5.64

 

 

 

5.55

 

 

 

5.60

 

FHLB advances and other borrowed funds

 

0.51

 

 

 

0.41

 

 

 

0.43

 

 

 

0.43

 

 

 

0.49

 

Interest-bearing liabilities

 

0.37

 

 

 

0.30

 

 

 

0.31

 

 

 

0.35

 

 

 

0.37

 

Net interest margin

 

3.55

 

 

 

3.28

 

 

 

3.32

 

 

 

3.40

 

 

 

3.46

 

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)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

PPP loans outstanding, net of deferred fees

$

49,175

 

 

$

134,084

 

 

$

271,958

 

 

$

438,959

 

 

$

396,660

 

Average PPP loans outstanding, net

 

89,152

 

 

 

194,382

 

 

 

365,295

 

 

 

489,104

 

 

 

664,375

 

PPP interest and fee income recognized

 

1,557

 

 

 

2,858

 

 

 

4,864

 

 

 

6,048

 

 

 

7,940

 

PPP deferred fees remaining

 

524

 

 

 

1,851

 

 

 

4,215

 

 

 

7,428

 

 

 

12,243

 

PPP average yield

 

7.01

%

 

 

5.96

%

 

 

5.28

%

 

 

4.91

%

 

 

4.79

%

 

Quarter ended

 

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 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

$

1.19

 

 

$

1.15

 

 

$

1.23

 

 

$

1.17

 

 

$

1.33

 

 

$

1.23

 

 

$

0.38

 

 

$

0.25

 

 

$

1.23

 

 

$

1.04

 

ROAA

 

1.34

%

 

 

1.31

%

 

 

1.42

%

 

 

1.38

%

 

 

1.52

%

 

 

1.45

%

 

 

0.45

%

 

 

0.31

%

 

 

1.50

%

 

 

1.35

%

PPNR ROAA*

 

1.73

%

 

 

1.70

%

 

 

1.70

%

 

 

1.64

%

 

 

1.89

%

 

 

1.80

%

 

 

1.81

%

 

 

1.68

%

 

 

1.85

%

 

 

1.65

%

Tangible common equity/tangible assets*

 

7.80

%

 

 

7.83

%

 

 

7.62

%

 

 

7.70

%

 

 

8.13

%

 

 

8.31

%

 

 

8.40

%

 

 

8.71

%

 

 

8.32

%

 

 

8.66

%

Leverage ratio

 

9.8

%

 

 

9.8

%

 

 

9.6

%

 

 

9.7

%

 

 

9.7

%

 

 

10.0

%

 

 

9.7

%

 

 

10.2

%

 

 

9.4

%

 

 

10.0

%

NIM

 

3.55

%

 

 

3.52

%

 

 

3.28

%

 

 

3.23

%

 

 

3.32

%

 

 

3.26

%

 

 

3.40

%

 

 

3.33

%

 

 

3.46

%

 

 

3.36

%

Allowance for credit losses/loans

 

1.52

%

 

 

1.69

%

 

 

1.54

%

 

 

1.73

%

 

 

1.61

%

 

 

1.84

%

 

 

1.67

%

 

 

1.94

%

 

 

1.77

%

 

 

2.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* 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)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

ASSET QUALITY

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

$

(175

)

 

$

1,521

 

 

$

3,263

 

 

$

1,850

 

 

$

869

 

Nonperforming loans

 

19,560

 

 

 

21,160

 

 

 

28,024

 

 

 

41,554

 

 

 

42,252

 

Classified assets

 

96,801

 

 

 

93,199

 

 

 

100,797

 

 

 

104,220

 

 

 

100,063

 

Nonperforming loans to total loans

 

0.21

%

 

 

0.23

%

 

 

0.31

%

 

 

0.46

%

 

 

0.58

%

Nonperforming assets to total assets

 

0.16

%

 

 

0.17

%

 

 

0.23

%

 

 

0.35

%

 

 

0.44

%

Allowance for credit losses to total loans

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

 

 

1.77

%

Allowance for credit losses to nonperforming loans

 

718.5

%

 

 

657.9

%

 

 

517.6

%

 

 

366.0

%

 

 

303.4

%

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

 

(0.01

) %

 

 

0.07

%

 

 

0.14

%

 

 

0.08

%

 

 

0.05

%

 

 

 

 

 

 

 

 

 

 

WEALTH MANAGEMENT

 

 

 

 

 

 

 

 

 

Trust assets under management

$

1,757,228

 

 

$

1,943,428

 

 

$

2,083,543

 

 

$

2,017,178

 

 

$

1,945,293

 

Trust assets under administration

 

2,184,019

 

 

 

2,400,679

 

 

 

2,556,266

 

 

 

2,486,152

 

 

 

2,487,545

 

 

 

 

 

 

 

 

 

 

 

MARKET DATA

 

 

 

 

 

 

 

 

 

Book value per common share

$

36.97

 

 

$

37.35

 

 

$

38.53

 

 

$

37.52

 

 

$

35.86

 

Tangible book value per common share1

$

26.63

 

 

$

27.06

 

 

$

28.28

 

 

$

27.38

 

 

$

26.85

 

Market value per share

$

41.50

 

 

$

47.31

 

 

$

47.09

 

 

$

45.28

 

 

$

46.39

 

Period end common shares outstanding

 

37,206

 

 

 

37,516

 

 

 

37,820

 

 

 

38,372

 

 

 

31,185

 

Average basic common shares

 

37,243

 

 

 

37,788

 

 

 

38,228

 

 

 

36,878

 

 

 

31,265

 

Average diluted common shares

 

37,282

 

 

 

37,858

 

 

 

38,311

 

 

 

36,946

 

 

 

31,312

 

 

 

 

 

 

 

 

 

 

 

CAPITAL

 

 

 

 

 

 

 

 

 

Total risk-based capital to risk-weighted assets

 

14.2

%

 

 

14.4

%

 

 

14.7

%

 

 

14.5

%

 

 

14.9

%

Tier 1 capital to risk-weighted assets

 

12.5

%

 

 

12.7

%

 

 

13.0

%

 

 

12.2

%

 

 

12.3

%

Common equity tier 1 capital to risk-weighted assets

 

10.9

%

 

 

11.0

%

 

 

11.3

%

 

 

11.2

%

 

 

11.1

%

Tangible common equity to tangible assets1

 

7.8

%

 

 

7.6

%

 

 

8.1

%

 

 

8.4

%

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

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

 

Six months ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

 

Jun 30,

2022

 

Jun 30,

2021

CORE PERFORMANCE MEASURES

 

 

 

 

Net interest income

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

81,738

 

 

$

210,778

 

 

$

160,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

16,204

 

 

 

32,835

 

 

 

27,494

 

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

 

(90

)

 

 

19

 

 

 

 

 

 

335

 

 

 

549

 

 

 

(71

)

 

 

549

 

Core noninterest income

 

14,284

 

 

 

18,622

 

 

 

22,630

 

 

 

17,284

 

 

 

15,655

 

 

 

32,906

 

 

 

26,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total core revenue

 

123,897

 

 

 

119,787

 

 

 

124,690

 

 

 

114,557

 

 

 

97,393

 

 

 

243,684

 

 

 

187,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

52,456

 

 

 

128,224

 

 

 

105,340

 

Less branch closure expenses

 

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

 

 

 

 

 

Less merger-related expenses

 

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

 

1,949

 

 

 

 

 

 

5,091

 

Core noninterest expense

 

65,424

 

 

 

62,800

 

 

 

61,374

 

 

 

58,773

 

 

 

50,507

 

 

 

128,224

 

 

 

100,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core efficiency ratio

 

52.81

%

 

 

52.43

%

 

 

49.22

%

 

 

51.30

%

 

 

51.86

%

 

 

52.62

%

 

 

53.38

%

 

Quarter ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

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

Shareholders’ equity

$

1,447,412

 

 

$

1,473,177

 

 

$

1,529,116

 

 

$

1,439,635

 

 

$

1,118,301

 

Less preferred stock

 

71,988

 

 

 

71,988

 

 

 

71,988

 

 

 

 

 

 

 

Less goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

 

 

260,567

 

Less intangible assets

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

 

 

20,358

 

Tangible common equity

$

990,732

 

 

$

1,015,170

 

 

$

1,069,678

 

 

$

1,050,443

 

 

$

837,376

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,084,506

 

 

$

13,706,769

 

 

$

13,537,358

 

 

$

12,888,016

 

 

$

10,346,993

 

Less goodwill

 

365,164

 

 

 

365,164

 

 

 

365,164

 

 

 

365,415

 

 

 

260,567

 

Less intangible assets

 

19,528

 

 

 

20,855

 

 

 

22,286

 

 

 

23,777

 

 

 

20,358

 

Tangible assets

$

12,699,814

 

 

$

13,320,750

 

 

$

13,149,908

 

 

$

12,498,824

 

 

$

10,066,068

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

 

 

8.32

%

 

Quarter Ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Jun 30,

2021

AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY

Average shareholder’s equity

$

1,474,267

 

 

$

1,536,221

 

 

$

1,116,969

 

Less average preferred stock

 

71,988

 

 

 

71,988

 

 

 

 

Less average goodwill

 

365,164

 

 

 

365,164

 

 

 

260,567

 

Less average intangible assets

 

20,175

 

 

 

21,540

 

 

 

20,997

 

Average tangible common equity

$

1,016,940

 

 

$

1,077,529

 

 

$

835,405

 

 

 

 

 

 

 

Net income available to common shareholders

$

44,211

 

 

$

46,464

 

 

$

38,405

 

Return on average tangible common equity

 

17.44

%

 

 

17.49

%

 

 

18.44

%

Quarter ended

 

Six months ended

($ in thousands)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

 

Jun 30,

2022

 

Jun 30,

2021

CALCULATION OF PRE-PROVISION NET REVENUE

 

 

 

 

Net interest income

$

109,613

 

 

$

101,165

 

 

$

102,060

 

 

$

97,273

 

 

$

81,738

 

 

$

210,778

 

 

$

160,861

 

Noninterest income

 

14,194

 

 

 

18,641

 

 

 

22,630

 

 

 

17,619

 

 

 

16,204

 

 

 

32,835

 

 

 

27,494

 

Less noninterest expense

 

65,424

 

 

 

62,800

 

 

 

63,694

 

 

 

76,885

 

 

 

52,456

 

 

 

128,224

 

 

 

105,340

 

Branch closure expenses

 

 

 

 

 

 

 

 

 

 

3,441

 

 

 

 

 

 

 

 

 

 

Merger-related expenses

 

 

 

 

 

 

 

2,320

 

 

 

14,671

 

 

 

1,949

 

 

 

 

 

 

5,091

 

PPNR

$

58,383

 

 

$

57,006

 

 

$

63,316

 

 

$

56,119

 

 

$

47,435

 

 

$

115,389

 

 

$

88,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

 

$

10,281,344

 

 

$

13,571,002

 

 

$

10,111,641

 

ROAA - GAAP net income

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

 

 

1.50

%

 

 

1.38

%

 

 

1.36

%

PPNR ROAA - PPNR

 

1.73

%

 

 

1.70

%

 

 

1.89

%

 

 

1.81

%

 

 

1.85

%

 

 

1.71

%

 

 

1.76

%

Quarter Ended

($ in thousands, except per share data)

Jun 30,

2022

 

Mar 31,

2022

 

Dec 31,

2021

 

Sep 30,

2021

 

Jun 30,

2021

IMPACT OF PAYCHECK PROTECTION PROGRAM

Net income - GAAP

$

45,149

 

 

$

47,693

 

 

$

50,811

 

 

$

13,913

 

 

$

38,405

 

PPP interest and fee income

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

 

 

(7,940

)

Related tax effect

 

392

 

 

 

720

 

 

 

1,226

 

 

 

1,506

 

 

 

1,977

 

Adjusted net income - Non-GAAP

$

43,984

 

 

$

45,555

 

 

$

47,173

 

 

$

9,371

 

 

$

32,442

 

Preferred stock dividends

 

938

 

 

 

1,229

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common shareholders- Non-GAAP

$

43,046

 

 

$

44,326

 

 

$

47,173

 

 

$

9,371

 

 

$

32,442

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares

 

37,282

 

 

 

37,858

 

 

 

38,311

 

 

 

36,946

 

 

 

31,312

 

EPS - GAAP net income available to common shareholders

$

1.19

 

 

$

1.23

 

 

$

1.33

 

 

$

0.38

 

 

$

1.23

 

EPS - Adjusted net income available to common shareholders

$

1.15

 

 

$

1.17

 

 

$

1.23

 

 

$

0.25

 

 

$

1.04

 

 

 

 

 

 

 

 

 

 

 

Average Assets - GAAP

$

13,528,474

 

 

$

13,614,003

 

 

$

13,267,193

 

 

$

12,334,558

 

 

$

10,281,344

 

Average PPP loans, net

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

 

 

(664,375

)

Adjusted average assets - Non-GAAP

$

13,439,322

 

 

$

13,419,621

 

 

$

12,901,898

 

 

$

11,845,454

 

 

$

9,616,969

 

 

 

 

 

 

 

 

 

 

 

ROAA - GAAP net income

 

1.34

%

 

 

1.42

%

 

 

1.52

%

 

 

0.45

%

 

 

1.50

%

ROAA - Adjusted net income, adjusted average assets

 

1.31

%

 

 

1.38

%

 

 

1.45

%

 

 

0.31

%

 

 

1.35

%

 

 

 

 

 

 

 

 

 

 

PPNR - Non-GAAP (see reconciliation above)

$

58,383

 

 

$

57,006

 

 

$

63,316

 

 

$

56,119

 

 

$

47,435

 

PPP interest and fee income

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

 

 

(7,940

)

Adjusted PPNR - Non-GAAP

$

56,826

 

 

$

54,148

 

 

$

58,452

 

 

$

50,071

 

 

$

39,495

 

 

 

 

 

 

 

 

 

 

 

PPNR ROAA - PPNR

 

1.73

%

 

 

1.70

%

 

 

1.89

%

 

 

1.81

%

 

 

1.85

%

PPNR ROAA - adjusted PPNR, adjusted average assets

 

1.70

%

 

 

1.64

%

 

 

1.80

%

 

 

1.68

%

 

 

1.65

%

 

 

 

 

 

 

 

 

 

 

Tangible assets - Non-GAAP (see reconciliation above)

$

12,699,814

 

 

$

13,320,750

 

 

$

13,149,908

 

 

$

12,498,824

 

 

$

10,066,068

 

PPP loans outstanding, net

 

(49,175

)

 

 

(134,084

)

 

 

(271,958

)

 

 

(438,959

)

 

 

(396,660

)

Adjusted tangible assets - Non-GAAP

$

12,650,639

 

 

$

13,186,666

 

 

$

12,877,950

 

 

$

12,059,865

 

 

$

9,669,408

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity Non-GAAP (see reconciliation above)

$

990,732

 

 

$

1,015,170

 

 

$

1,069,678

 

 

$

1,050,443

 

 

$

837,376

 

Tangible common equity to tangible assets

 

7.80

%

 

 

7.62

%

 

 

8.13

%

 

 

8.40

%

 

 

8.32

%

Tangible common equity to tangible assets - adjusted tangible assets

 

7.83

%

 

 

7.70

%

 

 

8.31

%

 

 

8.71

%

 

 

8.66

%

 

 

 

 

 

 

 

 

 

 

Average assets for leverage ratio

$

13,265,790

 

 

$

13,273,520

 

 

$

12,915,944

 

 

$

11,972,171

 

 

$

10,021,240

 

Average PPP loans, net

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

 

 

(664,375

)

Adjusted average assets for leverage ratio - Non-GAAP

$

13,176,638

 

 

$

13,079,138

 

 

$

12,550,649

 

 

$

11,483,067

 

 

$

9,356,865

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital

$

1,295,791

 

 

$

1,271,342

 

 

$

1,257,462

 

 

$

1,166,529

 

 

$

937,840

 

Leverage ratio

 

9.8

%

 

 

9.6

%

 

 

9.7

%

 

 

9.7

%

 

 

9.4

%

Leverage ratio - adjusted average assets for leverage ratio

 

9.8

%

 

 

9.7

%

 

 

10.0

%

 

 

10.2

%

 

 

10.0

%

 

 

 

 

 

 

 

 

 

 

 

Net interest income - tax equivalent

$

111,312

 

 

$

102,671

 

 

$

103,567

 

 

$

98,573

 

 

$

82,962

 

PPP interest and fee income

 

(1,557

)

 

 

(2,858

)

 

 

(4,864

)

 

 

(6,048

)

 

 

(7,940

)

Adjusted net interest income - tax equivalent

$

109,755

 

 

$

99,813

 

 

$

98,703

 

 

$

92,525

 

 

$

75,022

 

 

 

 

 

 

 

 

 

 

 

Average earning assets - GAAP

$

12,579,211

 

 

$

12,711,116

 

 

$

12,373,149

 

 

$

11,513,279

 

 

$

9,615,981

 

Average PPP loans, net

 

(89,152

)

 

 

(194,382

)

 

 

(365,295

)

 

 

(489,104

)

 

 

(664,375

)

Adjusted average earning assets - Non-GAAP

$

12,490,059

 

 

$

12,516,734

 

 

$

12,007,854

 

 

$

11,024,175

 

 

$

8,951,606

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - tax equivalent

 

3.55

%

 

 

3.28

%

 

 

3.32

%

 

 

3.40

%

 

 

3.46

%

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

 

3.52

%

 

 

3.23

%

 

 

3.26

%

 

 

3.33

%

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

Loans - GAAP

$

9,269,176

 

 

$

9,056,073

 

 

$

9,017,642

 

 

$

9,116,583

 

 

$

7,226,267

 

PPP and other guaranteed loans, net

 

(967,396

)

 

 

(1,023,509

)

 

 

(1,151,895

)

 

 

(1,277,452

)

 

 

(1,106,414

)

Adjusted loans - Non-GAAP

$

8,301,780

 

 

$

8,032,564

 

 

$

7,865,747

 

 

$

7,839,131

 

 

$

6,119,853

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

$

140,546

 

 

$

139,212

 

 

$

145,041

 

 

$

152,096

 

 

$

128,185

 

Allowance for credit losses/loans - GAAP

 

1.52

%

 

 

1.54

%

 

 

1.61

%

 

 

1.67

%

 

 

1.77

%

Allowance for credit losses/loans - adjusted loans

 

1.69

%

 

 

1.73

%

 

 

1.84

%

 

 

1.94

%

 

 

2.09

%

 

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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