Enterprise Financial Reports Third Quarter 2024 Results

Rhea-AI Summary

Enterprise Financial (EFSC) reported its Q3 2024 results, showing significant growth. Net income reached $50.6 million, with Earnings Per Share (EPS) at $1.32, up from $1.19 in the previous quarter. Net interest income increased to $143.5 million, while net interest margin (NIM) slightly decreased to 4.17%. Total loans rose to $11.1 billion, and total deposits increased to $12.5 billion. Return on Average Assets (ROAA) improved to 1.36%, and Return on Average Tangible Common Equity (ROATCE) increased to 14.55%. The company repurchased 195,114 shares and raised its dividend to $0.28 per share. Noninterest income climbed to $21.4 million, driven by higher tax credit income and gains from real estate sales. However, noninterest expense also rose to $98.0 million due to higher employee compensation and deposit service costs. The allowance for credit losses decreased to 1.26% of total loans, and nonperforming assets dropped to 0.22% of total assets.

Positive

• Net income increased to $50.6 million.
• EPS rose to $1.32 from $1.19 in the previous quarter.
• Net interest income grew to $143.5 million.
• Total loans increased to $11.1 billion.
• Total deposits increased to $12.5 billion.
• ROAA improved to 1.36%.
• ROATCE increased to 14.55%.
• Noninterest income rose to $21.4 million.
• Repurchased 195,114 shares.
• Increased quarterly dividend to $0.28 per share.

Negative

• Net interest margin decreased to 4.17%.
• Noninterest expense increased to $98.0 million.
• Allowance for credit losses decreased to 1.26% of total loans.

Insights

Financial Analyst

Enterprise Financial Services Corp delivered strong Q3 2024 results, showing meaningful improvement across key performance metrics. Net income reached $50.6 million ($1.32 diluted EPS), representing an 11% increase from Q2 and 13% year-over-year growth. The bank's fundamentals appear robust as net interest income expanded to $143.5 million despite a slight 2 basis point compression in net interest margin to 4.17%.

The balance sheet shows healthy organic growth with loans increasing by $79.9 million and deposits growing by $182.9 million during the quarter. This deposit growth provides valuable liquidity, which the bank has deployed primarily into its securities portfolio. The bank's asset quality improved substantially with nonperforming assets declining to 0.22% of total assets from 0.33% in the linked quarter.

Capital management remains shareholder-friendly with a dividend increase to $0.28 per share and the repurchase of 195,114 shares. The tangible book value per share grew at an impressive annualized rate of 25% for the quarter, reaching $37.26. Capital ratios remain strong with tangible common equity to tangible assets at 9.50%.

Despite Federal Reserve rate cuts in September, EFSC maintained a stable interest rate spread due to its asset-sensitive balance sheet and proactive deposit pricing adjustments. The bank appears well-positioned to navigate the changing rate environment while continuing to grow its loan portfolio and expand its core relationship banking business.

Banking Operations Specialist

EFSC's Q3 operational execution demonstrates effective balance sheet management during this transitional interest rate environment. Their deposit gathering success is particularly notable, with total deposits increasing to $12.5 billion – growing both quarter-over-quarter and year-over-year without excessive reliance on brokered deposits. The composition of these deposits shows strength, with 31.6% being non-interest bearing and approximately 70% of deposits having some form of insurance coverage.

The bank's efficiency initiatives deserve attention, though the core efficiency ratio rose slightly to 58.4% from 56.2% year-over-year. This increase stems from investments in relationship bankers and the ongoing core system conversion expected to complete in Q4 2024. These investments, while pressuring short-term efficiency ratios, position the bank for future scale advantages.

Asset quality metrics show significant improvement with nonperforming assets declining $15.2 million from the previous quarter. Net charge-offs remained controlled at 0.14% of average loans, demonstrating sound underwriting discipline. The provision for credit losses decreased to $4.1 million from $8.0 million in the year-ago quarter, reflecting improved credit conditions.

The bank maintained liquidity reserves of approximately $5.8 billion, including both on-balance sheet and available off-balance sheet sources. This substantial liquidity buffer provides flexibility for loan growth opportunities while ensuring resilience against potential market disruptions. EFSC's operational performance reflects sound banking fundamentals with improving credit metrics, strong capital generation, and effective management of interest rate risk.

Third Quarter Results

• Net income of $50.6 million, or $1.32 per diluted common share, compared to $1.19 in the linked quarter and $1.17 in the prior year quarter
• Net interest margin of 4.17%, quarterly decrease of 2 basis points
• Net interest income of $143.5 million, quarterly increase of $2.9 million
• Total loans of $11.1 billion, quarterly increase of $79.9 million
• Total deposits of $12.5 billion, quarterly increase of $182.9 million
• Return on Average Assets (“ROAA”) of 1.36%, compared to 1.25% and 1.26% in the linked and prior year quarters, respectively
• Return on Average Tangible Common Equity (“ROATCE”)¹ of 14.55%, compared to 13.77% and 14.49% in the linked and prior year quarters, respectively
• Tangible common equity to tangible assets¹ of 9.50%, an increase of 32 basis points and 99 basis points from the linked and prior year quarters, respectively
• Tangible book value per share¹ of $37.26, annualized quarterly increase of 25%
• Repurchased 195,114 shares and increased quarterly dividend $0.01 to $0.28 per common share for the fourth quarter 2024

ST. LOUIS--(BUSINESS WIRE)-- 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, “We are proud of our third quarter results, with a stable net interest margin, expansion in net interest income and an 11% increase in diluted earnings per share over the linked quarter. Our consistent return profile increased tangible book value per share 25% on an annualized basis from the linked quarter, and 20% over the prior year’s third quarter. With the strength of our balance sheet and capital position as a foundation, I believe we are well positioned to continue executing on the opportunities within our markets.”

Highlights

• Earnings - Net income in the third quarter 2024 was $50.6 million, an increase of $5.1 million and $5.9 million compared to the linked and prior year quarters, respectively. Earnings per diluted common share for the third quarter 2024 was $1.32, compared to $1.19 and $1.17 for the linked and prior year quarters, respectively. Adjusted diluted earnings per common share¹ was $1.29 for the third quarter 2024, compared to $1.21 and $1.17 for the linked and prior year quarters, respectively.

• Pre-provision net revenue (“PPNR”)¹ - PPNR of $65.1 million in the third quarter 2024 increased $1.8 million from the linked quarter and was relatively stable with the prior year quarter. The increase from the linked quarter was primarily due to higher noninterest income from sales of other real estate owned, and higher net interest income that benefited from an increase in average earning assets. The increase in operating revenue was partially offset by an increase in noninterest expense, primarily variable deposit services costs and employee compensation and benefits.

• Net interest income and net interest margin (“NIM”) - Net interest income of $143.5 million for the third quarter 2024 increased $2.9 million and $1.8 million from the linked and prior year quarters, respectively. Compared to the linked quarter, net interest income for the third quarter 2024 increased primarily due to higher interest-earning asset balances and an additional day in the quarter. NIM was 4.17% for the third quarter 2024, compared to 4.19% and 4.33% for the linked and prior year quarters, respectively. The total cost of deposits of 2.18% for the third quarter 2024 increased 2 basis points and 34 basis points from the linked and prior year quarters, respectively.

• Noninterest income - Noninterest income of $21.4 million for the third quarter 2024 increased $5.9 million and $9.3 million from the linked and prior year quarters, respectively. The increase from the linked and prior year quarters was primarily due to an increase in tax credit income, a net gain on the sale of other real estate owned and an increase in income on community development investments.

• Noninterest expense - Noninterest expense of $98.0 million for the third quarter 2024 increased $4.0 million and $9.4 million from the linked and prior year quarters, respectively. The increase from the linked and prior year quarters was primarily driven by higher employee compensation and variable deposit servicing costs. The Company continues to have success in recruiting new relationship managers and in deposit generation from existing relationships, both of which have contributed to an increase in average deposit balances. The increase from the prior year quarter was also affected by expenses related to the core system conversion.

• Loans - Loans totaled $11.1 billion at September 30, 2024, an increase of $79.9 million from the linked quarter and an increase of $463.1 million from the prior year quarter. Average loans totaled $11.0 billion for both the current and linked quarter and $10.5 billion in the prior year quarter.

• Asset quality - The allowance for credit losses to total loans was 1.26% at September 30, 2024, compared to 1.27% at June 30, 2024 and 1.34% at September 30, 2023. The ratio of nonperforming assets to total assets was 0.22% at September 30, 2024, compared to 0.33% and 0.40% at June 30, 2024 and September 30, 2023, respectively. The provision for credit losses recorded in the third quarter 2024 was $4.1 million, compared to $4.8 million and $8.0 million for the linked and prior year quarters, respectively.

• Deposits - Deposits totaled $12.5 billion at September 30, 2024, an increase of $182.9 million from the linked quarter. Excluding brokered certificates of deposits, deposits increased $196.9 million. Average deposits were $12.5 billion, $12.3 billion and $11.9 billion for the current, linked and prior year quarters, respectively. At September 30, 2024, noninterest-bearing deposit accounts totaled $3.9 billion, or 31.6% of total deposits, and the loan to deposit ratio was 88.9%.

• Liquidity - The total available on- and off-balance-sheet liquidity was approximately $5.8 billion at September 30, 2024. On-balance-sheet liquidity consisted of cash of $426.4 million and $1.4 billion in unpledged investment securities at September 30, 2024. Off-balance-sheet liquidity consisted of $1.2 billion available through the Federal Home Loan Bank, $2.6 billion available through the Federal Reserve and $140.0 million through correspondent bank lines. The Company also has an unused $25.0 million revolving line of credit and maintains a shelf registration allowing for the issuance of various forms of equity and debt securities.

• Capital - Total shareholders’ equity was $1.8 billion and the tangible common equity to tangible assets ratio² was 9.50% at September 30, 2024, compared to 9.18% at June 30, 2024. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.5% and a total risk-based capital ratio of 13.6% at September 30, 2024. The Company’s common equity tier 1 ratio and total risk-based capital ratio were 11.9% and 14.8%, respectively, at September 30, 2024.

The Company’s board of directors approved a quarterly dividend of $0.28 per common share, payable on December 31, 2024 to shareholders of record as of December 16, 2024. The board of directors also declared a cash dividend of $12.50 per share of Series A Preferred Stock (or $0.3125 per depositary share) representing a 5% per annum rate for the period commencing (and including) September 15, 2024 to (but excluding) December 15, 2024. The dividend will be payable on December 15, 2024 and will be paid on December 16, 2024 to holders of record of Series A Preferred Stock as of November 29, 2024.

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1 ROATCE, tangible common equity to tangible assets, tangible book value per share, adjusted diluted earnings per share and PPNR are non-GAAP measures. Please refer to discussion and reconciliation of these measures in the accompanying financial tables.

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

Net Interest Income and NIM

Average Balance Sheets

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

	Quarter ended
	September 30, 2024									June 30, 2024									September 30, 2023
($ 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	$	10,971,575		$	191,638		6.95	%		$	10,962,488		$	189,346		6.95	%		$	10,521,966		$	180,382		6.80	%
Securities2		2,503,124			21,404		3.40				2,396,519			19,956		3.35				2,302,850			18,076		3.11
Interest-earning deposits		402,932			5,348		5.28				325,452			4,389		5.42				335,771			4,509		5.33
Total interest-earning assets		13,877,631			218,390		6.26				13,684,459			213,691		6.28				13,160,587			202,967		6.12
Noninterest-earning assets		971,824									961,922									908,273
Total assets	$	14,849,455								$	14,646,381								$	14,068,860
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	3,018,309		$	20,002		2.64	%		$	2,950,827		$	18,801		2.56	%		$	2,672,084		$	13,701		2.03	%
Money market accounts		3,551,492			33,493		3.75				3,434,712			31,926		3.74				3,079,221			26,427		3.40
Savings accounts		561,466			345		0.24				573,115			335		0.24				646,187			250		0.15
Certificates of deposit		1,368,339			14,928		4.34				1,412,263			15,312		4.36				1,519,119			14,976		3.91
Total interest-bearing deposits		8,499,606			68,768		3.22				8,370,917			66,374		3.19				7,916,611			55,354		2.77
Subordinated debentures and notes		156,329			2,695		6.86				156,188			2,684		6.91				155,769			2,466		6.28
FHLB advances		4,565			59		5.14				40,308			561		5.60				10,326			141		5.42
Securities sold under agreements to repurchase		140,255			1,217		3.45				158,969			1,401		3.54				146,893			969		2.61
Other borrowings		36,226			96		1.05				36,203			95		1.06				50,571			337		2.66
Total interest-bearing liabilities		8,836,981			72,835		3.28				8,762,585			71,115		3.26				8,280,170			59,267		2.84
Noninterest-bearing liabilities:
Demand deposits		4,046,480									3,973,336									4,005,923
Other liabilities		161,625									162,220									134,162
Total liabilities		13,045,086									12,898,141									12,420,255
Shareholders' equity		1,804,369									1,748,240									1,648,605
Total liabilities and shareholders' equity	$	14,849,455								$	14,646,381								$	14,068,860
Total net interest income				$	145,555								$	142,576								$	143,700
Net interest margin							4.17	%								4.19	%								4.33	%
1 Average balances include nonaccrual loans. Interest income includes net loan fees of $2.6 million, $2.2 million, and $3.3 million for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were $2.1 million for each of the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

Net interest income of $143.5 million for the third quarter 2024 increased $2.9 million and $1.8 million from the linked and prior year quarters, respectively. Net interest income on a tax equivalent basis was $145.6 million, $142.6 million and $143.7 million for the current, linked and prior year quarters, respectively. The increase from the linked and prior quarters reflects the benefit of higher yields combined with organic growth. In late September 2024 the Federal Reserve reduced the federal funds target rate by 50 basis points. In response, since the Company maintains an asset-sensitive balance sheet, deposit pricing has been adjusted to partially mitigate the impact on income from the repricing of variable rate loans.

Interest income increased $4.7 million during the third quarter 2024 due to increases in all interest earning categories, including loans, securities and interest earning cash accounts. Interest income increased primarily due to an increase in average balances compared to the linked quarter. Continued success in deposit generation has increased liquidity, which has been primarily deployed into the securities portfolio.

The average interest rate of new loan originations in the third quarter 2024 was 7.84%, a decrease of 23 basis points from the linked quarter. Investment purchases in the third quarter 2024 had a weighted average, tax equivalent yield of 4.97%.

Interest expense increased $1.7 million in the third quarter 2024 primarily due to an increase in deposit interest expense, partially offset by a decline in interest expense on borrowings. The average cost of interest-bearing deposits was 3.22%, an increase of 3 basis points compared to the linked quarter. The total cost of deposits, including noninterest-bearing demand accounts, was 2.18% during the third quarter 2024, compared to 2.16% in the linked quarter.

NIM, on a tax equivalent basis, was 4.17% in the third quarter 2024, a decrease of 2 basis points from the linked quarter and a decrease of 16 basis points from the prior year quarter. For the month of September 2024, the loan portfolio yield was 6.90% and the cost of total deposits was 2.18%.

Investments

	At
	September 30, 2024							June 30, 2024							September 30, 2023
($ in thousands)	Carrying Value			Net Unrealized Loss				Carrying Value			Net Unrealized Loss				Carrying Value			Net Unrealized Loss
Available-for-sale (AFS)	$	1,786,793		$	(122,158	)		$	1,615,930		$	(172,734	)		$	1,487,104		$	(235,013	)
Held-to-maturity (HTM)		851,647			(46,351	)			772,648			(69,442	)			730,655			(108,780	)
Total	$	2,638,440		$	(168,509	)		$	2,388,578		$	(242,176	)		$	2,217,759		$	(343,793	)

Investment securities totaled $2.6 billion at September 30, 2024, an increase of $249.9 million from the linked quarter. The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities³ was 9.26% at September 30, 2024, compared to 8.82% at June 30, 2024.

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3 The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

Loans

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

	At
($ in thousands)	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
C&I	$	2,145,286			$	2,107,097			$	2,263,817			$	2,186,203			$	2,020,303
CRE investor owned		2,346,575				2,308,926				2,280,990				2,291,660				2,260,220
CRE owner occupied		1,322,714				1,313,742				1,279,929				1,262,264				1,255,885
SBA loans*		1,272,679				1,269,145				1,274,780				1,281,632				1,309,497
Sponsor finance*		819,079				865,883				865,180				872,264				888,000
Life insurance premium financing*		1,030,273				996,154				1,003,597				956,162				928,486
Tax credits*		724,441				738,249				718,383				734,594				683,580
Residential real estate		346,460				339,889				354,615				359,957				364,618
Construction and land development		796,586				791,780				726,742				670,567				639,555
Other		275,799				269,142				260,459				268,815				266,676
Total loans	$	11,079,892			$	11,000,007			$	11,028,492			$	10,884,118			$	10,616,820
Quarterly loan yield		6.95	%			6.95	%			6.87	%			6.87	%			6.80	%
Variable interest rate loans to total loans		61	%			61	%			61	%			61	%			61	%
*Specialty loan category

Loans totaled $11.1 billion at September 30, 2024, an increase of $79.9 million compared to the linked quarter. During the current quarter, C&I loans and CRE loans increased $38.2 million and $46.6 million, respectively. Average line utilization was approximately 44% for the quarter ended September 30, 2024, compared to 46% and 41% 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:

	At
($ in thousands)	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Nonperforming loans*	$	28,376			$	39,384			$	35,642			$	43,728			$	48,932
Other		4,516				8,746				8,466				5,736				6,933
Nonperforming assets*	$	32,892			$	48,130			$	44,108			$	49,464			$	55,865
Nonperforming loans to total loans		0.26	%			0.36	%			0.32	%			0.40	%			0.46	%
Nonperforming assets to total assets		0.22	%			0.33	%			0.30	%			0.34	%			0.40	%
Allowance for credit losses	$	139,778			$	139,464			$	135,498			$	134,771			$	142,133
Allowance for credit losses to total loans		1.26	%			1.27	%			1.23	%			1.24	%			1.34	%
Quarterly net charge-offs	$	3,850			$	605			$	5,864			$	28,479			$	6,856
*Guaranteed balances excluded	$	11,899			$	12,933			$	9,630			$	10,682			$	5,974

Nonperforming assets decreased $15.2 million and $23.0 million from the linked and prior year quarters, respectively. The decrease in nonperforming assets in the current quarter was primarily related to the sale of other real estate owned, the positive resolution on several loans, principal repayments and charge-offs in the quarter. Annualized net charge-offs totaled 14 basis points of average loans in the third quarter 2024, compared to 2 basis points in the linked quarter and 26 basis point in the prior year quarter.

The provision for credit losses totaled $4.1 million in the third quarter 2024, compared to $4.8 million and $8.0 million in the linked and prior year quarters, respectively. The provision for credit losses in the third quarter 2024 was primarily related to charge-offs and updates to qualitative factors used in the allowance calculation.

Deposits

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

	At
($ in thousands)	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Noninterest-bearing demand accounts	$	3,934,245			$	3,928,308			$	3,805,334			$	3,958,743			$	3,852,486
Interest-bearing demand accounts		3,048,981				2,951,899				2,956,282				2,950,259				2,749,598
Money market and savings accounts		4,121,543				4,039,626				4,006,702				3,994,455				3,837,145
Brokered certificates of deposit		480,934				494,870				659,005				482,759				695,551
Other certificates of deposit		879,619				867,680				826,378				790,155				775,127
Total deposit portfolio	$	12,465,322			$	12,282,383			$	12,253,701			$	12,176,371			$	11,909,907
Noninterest-bearing deposits to total deposits		31.6	%			32.0	%			31.1	%			32.5	%			32.3	%
Quarterly cost of deposits		2.18	%			2.16	%			2.13	%			2.03	%			1.84	%

Total deposits at September 30, 2024 were $12.5 billion, an increase of $182.9 million and $555.4 million from the linked and prior year quarters, respectively. Excluding brokered certificates of deposits, total deposits increased $196.9 million and $770.0 million, from the linked and prior year quarters, respectively. Reciprocal deposits, which are placed through third party programs to provide FDIC insurance on larger deposit relationships, totaled $1.2 billion at both September 30, 2024 and June 30, 2024.

Total estimated insured deposits,⁴ which includes collateralized deposits, reciprocal accounts and accounts that qualify for pass-through insurance, totaled $8.8 billion, or 70% of total deposits, at September 30, 2024 compared to $8.7 billion, or 71% of total deposits, at June 30, 2024.

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4 Estimated insured deposits is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

Noninterest Income

The following table presents a comparative summary of the major components of noninterest income for the periods indicated:

	Linked quarter comparison												Prior year comparison
	Quarter ended												Quarter ended
($ in thousands)	September 30, 2024			June 30, 2024			Increase (decrease)						September 30, 2023				Increase (decrease)
Deposit service charges	$	4,649		$	4,542		$	107		2	%		$	4,187			$	462			11	%
Wealth management revenue		2,599			2,590			9		—	%			2,614				(15	)		(1	)%
Card services revenue		2,573			2,497			76		3	%			2,560				13			1	%
Tax credit income (loss)		3,252			1,874			1,378		74	%			(2,673	)			5,925			222	%
Other income		8,347			3,991			4,356		109	%			5,397				2,950			55	%
Total noninterest income	$	21,420		$	15,494		$	5,926		38	%		$	12,085			$	9,335			77	%

Total noninterest income was $21.4 million for the third quarter 2024, an increase of $5.9 million and $9.3 million from the linked and prior year quarter, respectively. The increase from the linked and prior year quarters was primarily due to an increase in tax credit income from a positive change in credits carried at fair value, and a net gain on the sale of other real estate that is included in Other income. Tax credit income varies based on transaction volumes and fair value changes on credits carried at fair value.

The following table presents a comparative summary of the major components of other income for the periods indicated:

	Linked quarter comparison													Prior year comparison
	Quarter ended													Quarter ended
($ in thousands)	September 30, 2024			June 30, 2024			Increase (decrease)							September 30, 2023			Increase (decrease)
Gain on sales of other real estate owned	$	3,159		$	—		$	3,159			100	%		$	—		$	3,159			100	%
BOLI		1,123			855			268			31	%			822			301			37	%
Community development investments		1,177			381			796			209	%			338			839			248	%
Private equity fund distributions		614			411			203			49	%			181			433			239	%
Servicing fees		539			594			(55	)		(9	)%			701			(162	)		(23	)%
Swap fees		17			217			(200	)		(92	)%			54			(37	)		(69	)%
Gain on SBA loan sales		—			—			—			—	%			1,514			(1,514	)		(100	)%
Miscellaneous income		1,718			1,533			185			12	%			1,787			(69	)		(4	)%
Total other income	$	8,347		$	3,991		$	4,356			109	%		$	5,397		$	2,950			55	%

The increase in other income from the linked and prior year quarters was primarily driven by a $3.2 million net gain on the sale of other real estate in the third quarter 2024 and higher community development income. Community development income and private equity fund distributions are not consistent sources of income and fluctuate based on distributions from the underlying funds. The increase from the prior year quarter was partially offset by a decline in the gain on SBA loan sales that were transacted in the prior year.

Noninterest Expense

The following table presents a comparative summary of the major components of noninterest expense for the periods indicated:

	Linked quarter comparison												Prior year comparison
	Quarter ended												Quarter ended
($ in thousands)	September 30, 2024			June 30, 2024			Increase (decrease)						September 30, 2023			Increase (decrease)
Employee compensation and benefits	$	45,359		$	44,524		$	835		2	%		$	40,771		$	4,588		11	%
Deposit costs		23,781			21,706			2,075		10	%			20,987			2,794		13	%
Occupancy		4,372			4,197			175		4	%			4,198			174		4	%
Core conversion expense		1,375			1,250			125		10	%			—			1,375		100	%
Other expense		23,120			22,340			780		3	%			22,688			432		2	%
Total noninterest expense	$	98,007		$	94,017		$	3,990		4	%		$	88,644		$	9,363		11	%

Employee compensation and benefits increased $0.8 million from the linked quarter primarily due to an increase in the number of work days in the quarter and the success in recruiting new relationship bankers. Deposit costs relate to certain specialized deposit businesses that receive an earnings credit allowance for deposit related expenses that are impacted by interest rates and average balances. Deposit costs increased $2.1 million from the linked quarter primarily due to an increase of $151.6 million in average deposit vertical balances from the linked quarter. Expenses related to the core system conversion for the current and linked quarters were $1.4 million and $1.3 million, respectively, due to the continued progress on the project, which is expected to be completed during the fourth quarter 2024.

The increase in noninterest expense of $9.4 million from the prior year quarter was primarily due to an increase in the associate base, merit increases throughout 2023 and 2024, an increase in variable deposit costs due to higher earnings credit rates and average balances, and additional expenses incurred related to the core system conversion.

For the third quarter 2024, the core efficiency ratio⁵ was 58.4%, compared to 58.1% for the linked quarter and 56.2% 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 effective tax rate was 19.4%, compared to 20.5% and 21.7% in the linked and prior year quarters, respectively. The decrease in the effective tax rate from the linked and prior year quarters was driven by tax credit opportunities the Company has deployed as part of its tax planning strategy.

Capital

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

	At
($ in thousands)	September 30, 2024*				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Shareholders’ equity	$	1,832,011			$	1,755,273			$	1,731,725			$	1,716,068			$	1,611,880
Total risk-based capital to risk-weighted assets		14.8	%			14.6	%			14.3	%			14.2	%			14.1	%
Tier 1 capital to risk weighted assets		13.2	%			13.0	%			12.8	%			12.7	%			12.6	%
Common equity tier 1 capital to risk-weighted assets		11.9	%			11.7	%			11.4	%			11.3	%			11.2	%
Leverage ratio		11.2	%			11.1	%			11.0	%			11.0	%			10.9	%
Tangible common equity to tangible assets		9.50	%			9.18	%			9.01	%			8.96	%			8.51	%
*Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

Total equity was $1.8 billion at September 30, 2024, an increase of $76.7 million from the linked quarter. Tangible common book value per share was $37.26 at September 30, 2024, compared to $35.02 and $31.06 at June 30, 2024 and September 30, 2023, respectively.

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

Use of Non-GAAP Financial Measures

The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides additional financial measures, such as tangible common equity, PPNR, ROATCE, core efficiency ratio, the tangible common equity to tangible assets ratio, tangible book value per common share, estimated insured deposits and adjusted diluted earnings per share, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its tangible common equity, PPNR, ROATCE, core efficiency ratio, the tangible common equity to tangible assets ratio, tangible book value per common share, estimated insured deposits and adjusted diluted earnings per share, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as the FDIC special assessment, core conversion expenses, merger-related expenses, facilities charges, and the gain or loss on the sale of other real estate owned and 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 to tangible assets 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 22, 2024. During the call, management will review the third quarter 2024 results and related matters. This press release as well as a related slide presentation will be accessible on the Company’s website at www.enterprisebank.com under “Investor Relations” prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-800-715-9871. We encourage participants to pre-register for the conference call using the following link: https://bit.ly/EFSC3Q2024EarningsCallRegistration. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. A recorded replay of the conference call will be available on the website after the call’s completion. The replay will be available for at least two weeks following the conference call.

About Enterprise Financial Services Corp

Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $15.0 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, Florida, Kansas, Missouri, Nevada, and New Mexico, and SBA loan and deposit production offices throughout the country. Enterprise Bank & Trust offers a range of business and personal banking services and wealth management services. Enterprise Trust, a division of Enterprise Bank & Trust, provides financial planning, estate planning, investment management and trust services to businesses, individuals, institutions, retirement plans and non-profit organizations. Additional information is available at www.enterprisebank.com.

Enterprise Financial Services Corp’s common stock is traded on the Nasdaq Stock Market under the symbol “EFSC.” Please visit our website at www.enterprisebank.com to see our regularly posted material information.

Forward-looking Statements

Readers should note that, in addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, liquidity, yields and returns, loan diversification and credit management, shareholder value creation and the impact of acquisitions.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma”, “pipeline” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), U.S. fiscal debt, budget and tax matters, and any slowdown in global economic growth, risks associated with rapid increases or decreases in prevailing interest rates, our ability to attract and retain deposits and access to other sources of liquidity, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, changes in the method of determining LIBOR and the phase out of LIBOR, natural disasters, terrorist activities, war and geopolitical matters (including the war in Israel and potential for a broader regional conflict and the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity, and those factors and risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.

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

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

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
	Quarter ended																				Nine months ended
(in thousands, except per share data)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
EARNINGS SUMMARY
Net interest income	$	143,469			$	140,529			$	137,728			$	140,732			$	141,639			$	421,726			$	421,860
Provision for credit losses		4,099				4,819				5,756				18,053				8,030				14,674				18,552
Noninterest income		21,420				15,494				12,158				25,452				12,085				49,072				43,273
Noninterest expense		98,007				94,017				93,501				92,603				88,644				285,525				255,583
Income before income tax expense		62,783				57,187				50,629				55,528				57,050				170,599				190,998
Income tax expense		12,198				11,741				10,228				10,999				12,385				34,167				41,468
Net income		50,585				45,446				40,401				44,529				44,665				136,432				149,530
Preferred stock dividends		938				937				938				937				938				2,813				2,813
Net income available to common shareholders	$	49,647			$	44,509			$	39,463			$	43,592			$	43,727			$	133,619			$	146,717
Diluted earnings per common share	$	1.32			$	1.19			$	1.05			$	1.16			$	1.17			$	3.56			$	3.91
Adjusted diluted earnings per common share1	$	1.29			$	1.21			$	1.07			$	1.20			$	1.17			$	3.57			$	3.90
Return on average assets		1.36	%			1.25	%			1.12	%			1.23	%			1.26	%			1.24	%			1.47	%
Adjusted return on average assets1		1.32	%			1.27	%			1.14	%			1.28	%			1.26	%			1.24	%			1.46	%
Return on average common equity1		11.40	%			10.68	%			9.52	%			10.94	%			11.00	%			10.55	%			12.73	%
Adjusted return on average common equity1		11.09	%			10.90	%			9.70	%			11.35	%			11.00	%			10.58	%			12.69	%
ROATCE1		14.55	%			13.77	%			12.31	%			14.38	%			14.49	%			13.56	%			16.90	%
Adjusted ROATCE1		14.16	%			14.06	%			12.53	%			14.92	%			14.49	%			13.60	%			16.85	%
Net interest margin (tax equivalent)		4.17	%			4.19	%			4.13	%			4.23	%			4.33	%			4.17	%			4.50	%
Efficiency ratio		59.44	%			60.26	%			62.38	%			55.72	%			57.66	%			60.65	%			54.95	%
Core efficiency ratio1		58.42	%			58.09	%			60.21	%			53.06	%			56.18	%			58.89	%			53.55	%
Assets	$	14,954,125			$	14,615,666			$	14,613,338			$	14,518,590			$	14,025,042
Average assets	$	14,849,455			$	14,646,381			$	14,556,119			$	14,332,804			$	14,068,860			$	14,684,589			$	13,627,448
Period end common shares outstanding		37,184				37,344				37,515				37,416				37,385
Dividends per common share	$	0.27			$	0.26			$	0.25			$	0.25			$	0.25			$	0.78			$	0.75
Tangible book value per common share1	$	37.26			$	35.02			$	34.21			$	33.85			$	31.06
Tangible common equity to tangible assets1		9.50	%			9.18	%			9.01	%			8.96	%			8.51	%
Total risk-based capital to risk-weighted assets2		14.8	%			14.6	%			14.3	%			14.2	%			14.1	%
1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP.
2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended																	Nine months ended
(in thousands, except per share data)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024				Dec 31, 2023			Sep 30, 2023				Sep 30, 2024			Sep 30, 2023
INCOME STATEMENTS
NET INTEREST INCOME
Interest income	$	216,304		$	211,644		$	207,723			$	207,083		$	200,906			$	635,671		$	557,836
Interest expense		72,835			71,115			69,995				66,351			59,267				213,945			135,976
Net interest income		143,469			140,529			137,728				140,732			141,639				421,726			421,860
Provision for credit losses		4,099			4,819			5,756				18,053			8,030				14,674			18,552
Net interest income after provision for credit losses		139,370			135,710			131,972				122,679			133,609				407,052			403,308
NONINTEREST INCOME
Deposit service charges		4,649			4,542			4,423				4,334			4,187				13,614			12,225
Wealth management revenue		2,599			2,590			2,544				2,428			2,614				7,733			7,602
Card services revenue		2,573			2,497			2,412				2,666			2,560				7,482			7,362
Tax credit income (loss)		3,252			1,874			(2,190	)			9,688			(2,673	)			2,936			(492	)
Other income		8,347			3,991			4,969				6,336			5,397				17,307			16,576
Total noninterest income		21,420			15,494			12,158				25,452			12,085				49,072			43,273
NONINTEREST EXPENSE
Employee compensation and benefits		45,359			44,524			45,262				39,651			40,771				135,145			124,915
Deposit costs		23,781			21,706			20,277				21,606			20,987				65,764			50,688
Occupancy		4,372			4,197			4,326				4,313			4,198				12,895			12,213
FDIC special assessment		—			—			625				2,412			—				625			—
Core conversion expense		1,375			1,250			350				—			—				2,975			—
Other expense		23,120			22,340			22,661				24,621			22,688				68,121			67,767
Total noninterest expense		98,007			94,017			93,501				92,603			88,644				285,525			255,583
Income before income tax expense		62,783			57,187			50,629				55,528			57,050				170,599			190,998
Income tax expense		12,198			11,741			10,228				10,999			12,385				34,167			41,468
Net income	$	50,585		$	45,446		$	40,401			$	44,529		$	44,665			$	136,432		$	149,530
Preferred stock dividends		938			937			938				937			938				2,813			2,813
Net income available to common shareholders	$	49,647		$	44,509		$	39,463			$	43,592		$	43,727			$	133,619		$	146,717
Basic earnings per common share	$	1.33		$	1.19		$	1.05			$	1.16		$	1.17			$	3.57		$	3.93
Diluted earnings per common share	$	1.32		$	1.19		$	1.05			$	1.16		$	1.17			$	3.56		$	3.91

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	At
($ in thousands)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
BALANCE SHEET
ASSETS
Cash and due from banks	$	210,984			$	176,698			$	157,697			$	193,275			$	190,806
Interest-earning deposits		218,919				219,342				215,951				243,610				184,245
Debt and equity investments		2,714,194				2,460,549				2,443,977				2,434,902				2,279,578
Loans held for sale		304				606				610				359				212
Loans		11,079,892				11,000,007				11,028,492				10,884,118				10,616,820
Allowance for credit losses		(139,778	)			(139,464	)			(135,498	)			(134,771	)			(142,133	)
Total loans, net		10,940,114				10,860,543				10,892,994				10,749,347				10,474,687
Fixed assets, net		44,368				44,831				44,382				42,681				41,268
Goodwill		365,164				365,164				365,164				365,164				365,164
Intangible assets, net		9,400				10,327				11,271				12,318				13,425
Other assets		450,678				477,606				481,292				476,934				475,657
Total assets	$	14,954,125			$	14,615,666			$	14,613,338			$	14,518,590			$	14,025,042
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	3,934,245			$	3,928,308			$	3,805,334			$	3,958,743			$	3,852,486
Interest-bearing deposits		8,531,077				8,354,075				8,448,367				8,217,628				8,057,421
Total deposits		12,465,322				12,282,383				12,253,701				12,176,371				11,909,907
Subordinated debentures and notes		156,407				156,265				156,124				155,984				155,844
FHLB advances		150,000				78,000				125,000				—				—
Other borrowings		170,815				178,269				195,246				297,829				182,372
Other liabilities		179,570				165,476				151,542				172,338				165,039
Total liabilities		13,122,114				12,860,393				12,881,613				12,802,522				12,413,162
Shareholders’ equity:
Preferred stock		71,988				71,988				71,988				71,988				71,988
Common stock		372				373				375				374				374
Additional paid-in capital		992,642				994,116				995,969				995,208				992,044
Retained earnings		845,844				810,935				778,784				749,513				715,303
Accumulated other comprehensive loss		(78,835	)			(122,139	)			(115,391	)			(101,015	)			(167,829	)
Total shareholders’ equity		1,832,011				1,755,273				1,731,725				1,716,068				1,611,880
Total liabilities and shareholders’ equity	$	14,954,125			$	14,615,666			$	14,613,338			$	14,518,590			$	14,025,042

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Nine months ended
	September 30, 2024								September 30, 2023
($ in thousands)	Average Balance			Interest Income/ Expense			Average Yield/ Rate		Average Balance			Interest Income/ Expense			Average Yield/ Rate
AVERAGE BALANCE SHEET
ASSETS
Interest-earning assets:
Loans1, 2	$	10,954,063		$	567,687		6.92%		$	10,203,291		$	503,458		6.60%
Securities2		2,433,659			60,851		3.34			2,296,485			52,743		3.07
Interest-earning deposits		332,409			13,306		5.35			206,110			7,799		5.06
Total interest-earning assets		13,720,131			641,844		6.25			12,705,886			564,000		5.93
Noninterest-earning assets		964,458								921,562
Total assets	$	14,684,589							$	13,627,448
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing demand accounts	$	2,964,667		$	57,415		2.59%		$	2,462,988		$	29,728		1.61%
Money market accounts		3,462,993			96,777		3.73			2,942,970			62,397		2.83
Savings accounts		573,853			983		0.23			688,157			707		0.14
Certificates of deposit		1,374,176			44,441		4.32			1,139,489			28,555		3.35
Total interest-bearing deposits		8,375,689			199,616		3.18			7,233,604			121,387		2.24
Subordinated debentures and notes		156,188			7,863		6.72			155,633			7,306		6.28
FHLB advances		39,427			1,649		5.59			73,020			2,752		5.04
Securities sold under agreements to repurchase		167,939			4,422		3.52			174,783			2,422		1.85
Other borrowings		38,381			395		1.37			79,396			2,109		3.55
Total interest-bearing liabilities		8,777,624			213,945		3.26			7,716,436			135,976		2.36
Noninterest-bearing liabilities:
Demand deposits		3,982,015								4,178,038
Other liabilities		161,033								119,883
Total liabilities		12,920,672								12,014,357
Shareholders' equity		1,763,917								1,613,091
Total liabilities and shareholders' equity	$	14,684,589							$	13,627,448
Total net interest income				$	427,899							$	428,024
Net interest margin							4.17%								4.50%
1 Average balances include nonaccrual loans. Interest income includes net loan fees of $7.2 million and $10.7 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.
2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were $6.2 million for both the nine months ended September 30, 2024 and September 30, 2023, respectively.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	At or for the quarter ended
($ in thousands)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
LOAN PORTFOLIO
Commercial and industrial	$	4,628,488			$	4,619,448			$	4,766,310			$	4,672,559			$	4,448,535
Commercial real estate		4,915,176				4,856,751				4,804,803				4,803,571				4,794,355
Construction real estate		896,325				893,672				820,416				760,425				723,796
Residential real estate		355,279				351,934				367,218				372,188				376,120
Other		284,624				278,202				269,745				275,375				274,014
Total loans	$	11,079,892			$	11,000,007			$	11,028,492			$	10,884,118			$	10,616,820
DEPOSIT PORTFOLIO
Noninterest-bearing demand accounts	$	3,934,245			$	3,928,308			$	3,805,334			$	3,958,743			$	3,852,486
Interest-bearing demand accounts		3,048,981				2,951,899				2,956,282				2,950,259				2,749,598
Money market and savings accounts		4,121,543				4,039,626				4,006,702				3,994,455				3,837,145
Brokered certificates of deposit		480,934				494,870				659,005				482,759				695,551
Other certificates of deposit		879,619				867,680				826,378				790,155				775,127
Total deposits	$	12,465,322			$	12,282,383			$	12,253,701			$	12,176,371			$	11,909,907
AVERAGE BALANCES
Loans	$	10,971,575			$	10,962,488			$	10,927,932			$	10,685,961			$	10,521,966
Securities		2,503,124				2,396,519				2,400,571				2,276,915				2,302,850
Interest-earning assets		13,877,631				13,684,459				13,596,571				13,383,638				13,160,587
Assets		14,849,455				14,646,381				14,556,119				14,332,804				14,068,860
Deposits		12,546,086				12,344,253				12,180,703				12,163,346				11,922,534
Shareholders’ equity		1,804,369				1,748,240				1,738,698				1,652,882				1,648,605
Tangible common equity1		1,357,362				1,300,305				1,289,776				1,202,872				1,197,486
YIELDS (tax equivalent)
Loans		6.95	%			6.95	%			6.87	%			6.87	%			6.80	%
Securities		3.40				3.35				3.27				3.20				3.11
Interest-earning assets		6.26				6.28				6.20				6.20				6.12
Interest-bearing deposits		3.22				3.19				3.14				3.03				2.77
Deposits		2.18				2.16				2.13				2.03				1.84
Subordinated debentures and notes		6.86				6.91				6.40				6.30				6.28
FHLB advances and other borrowed funds		3.01				3.52				3.80				3.06				2.76
Interest-bearing liabilities		3.28				3.26				3.22				3.09				2.84
Net interest margin		4.17				4.19				4.13				4.23				4.33
1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
(in thousands, except per share data)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
ASSET QUALITY
Net charge-offs	$	3,850			$	605			$	5,864			$	28,479			$	6,856
Nonperforming loans		28,376				39,384				35,642				43,728				48,932
Classified assets		179,883				169,822				185,150				185,389				184,393
Nonperforming loans to total loans		0.26	%			0.36	%			0.32	%			0.40	%			0.46	%
Nonperforming assets to total assets		0.22	%			0.33	%			0.30	%			0.34	%			0.40	%
Allowance for credit losses to total loans		1.26	%			1.27	%			1.23	%			1.24	%			1.34	%
Allowance for credit losses to total loans, excluding guaranteed loans		1.38	%			1.38	%			1.34	%			1.35	%			1.47	%
Allowance for credit losses to nonperforming loans		492.6	%			354.1	%			380.2	%			308.2	%			290.5	%
Net charge-offs to average loans -annualized		0.14	%			0.02	%			0.22	%			1.06	%			0.26	%
WEALTH MANAGEMENT
Trust assets under management	$	2,499,807			$	2,367,409			$	2,352,902			$	2,235,073			$	2,129,408
SHARE DATA
Book value per common share	$	47.33			$	45.08			$	44.24			$	43.94			$	41.19
Tangible book value per common share1	$	37.26			$	35.02			$	34.21			$	33.85			$	31.06
Market value per share	$	51.26			$	40.91			$	40.56			$	44.65			$	37.50
Period end common shares outstanding		37,184				37,344				37,515				37,416				37,385
Average basic common shares		37,337				37,485				37,490				37,421				37,405
Average diluted common shares		37,483				37,540				37,597				37,554				37,520
CAPITAL
Total risk-based capital to risk-weighted assets2		14.8	%			14.6	%			14.3	%			14.2	%			14.1	%
Tier 1 capital to risk-weighted assets2		13.2	%			13.0	%			12.8	%			12.7	%			12.6	%
Common equity tier 1 capital to risk-weighted assets2		11.9	%			11.7	%			11.4	%			11.3	%			11.2	%
Tangible common equity to tangible assets1		9.50	%			9.18	%			9.01	%			8.96	%			8.51	%
1Refer to Reconciliations of Non-GAAP Financial Measures tables for a reconciliation of these measures to GAAP.
2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
	Quarter ended																				Nine months ended
($ in thousands)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
CORE EFFICIENCY RATIO
Net interest income (GAAP)	$	143,469			$	140,529			$	137,728			$	140,732			$	141,639			$	421,726			$	421,860
Tax-equivalent adjustment		2,086				2,047				2,040				1,915				2,061				6,173				6,164
Noninterest income (GAAP)		21,420				15,494				12,158				25,452				12,085				49,072				43,273
Less gain on sale of investment securities		—				—				—				220				—				—				381
Less gain (loss) on sale of other real estate owned		3,159				—				(2	)			—				—				3,157				187
Core revenue (non-GAAP)		163,816				158,070				151,928				167,879				155,785				473,814				470,729
Noninterest expense (GAAP)		98,007				94,017				93,501				92,603				88,644				285,525				255,583
Less FDIC special assessment		—				—				625				2,412				—				625				—
Less core conversion expense		1,375				1,250				350				—				—				2,975				—
Less amortization on intangibles		927				944				1,047				1,108				1,118				2,918				3,493
Core noninterest expense (non-GAAP)	$	95,705			$	91,823			$	91,479			$	89,083			$	87,526			$	279,007			$	252,090
Core efficiency ratio (non-GAAP)		58.42	%			58.09	%			60.21	%			53.06	%			56.18	%			58.89	%			53.55	%

	Quarter ended
(in thousands, except per share data)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
TANGIBLE COMMON EQUITY, TANGIBLE BOOK VALUE PER SHARE AND TANGIBLE COMMON EQUITY RATIO
Shareholders’ equity (GAAP)	$	1,832,011			$	1,755,273			$	1,731,725			$	1,716,068			$	1,611,880
Less preferred stock		71,988				71,988				71,988				71,988				71,988
Less goodwill		365,164				365,164				365,164				365,164				365,164
Less intangible assets		9,400				10,327				11,271				12,318				13,425
Tangible common equity (non-GAAP)	$	1,385,459			$	1,307,794			$	1,283,302			$	1,266,598			$	1,161,303
Less net unrealized losses on HTM securities, after tax		34,856				52,220				47,822				41,038				81,367
Tangible common equity adjusted for unrealized losses on HTM securities (non-GAAP)	$	1,350,603			$	1,255,574			$	1,235,480			$	1,225,560			$	1,079,936
Common shares outstanding		37,184				37,344				37,515				37,416				37,385
Tangible book value per share (non-GAAP)	$	37.26			$	35.02			$	34.21			$	33.85			$	31.06
Total assets (GAAP)	$	14,954,125			$	14,615,666			$	14,613,338			$	14,518,590			$	14,025,042
Less goodwill		365,164				365,164				365,164				365,164				365,164
Less intangible assets		9,400				10,327				11,271				12,318				13,425
Tangible assets (non-GAAP)	$	14,579,561			$	14,240,175			$	14,236,903			$	14,141,108			$	13,646,453
Tangible common equity to tangible assets (non-GAAP)		9.50	%			9.18	%			9.01	%			8.96	%			8.51	%
Tangible common equity to tangible assets adjusted for unrealized losses on HTM securities (non-GAAP)		9.26	%			8.82	%			8.68	%			8.67	%			7.91	%

	Quarter Ended																				Nine months ended
($ in thousands)	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE), RETURN ON AVERAGE ASSETS (ROAA) AND DILUTED EARNINGS PER SHARE
Average shareholder’s equity (GAAP)	$	1,804,369			$	1,748,240			$	1,738,698			$	1,652,882			$	1,648,605			$	1,763,917			$	1,613,091
Less average preferred stock		71,988				71,988				71,988				71,988				71,988				71,988				71,988
Less average goodwill		365,164				365,164				365,164				365,164				365,164				365,164				365,164
Less average intangible assets		9,855				10,783				11,770				12,858				13,967				10,799				15,094
Average tangible common equity (non-GAAP)	$	1,357,362			$	1,300,305			$	1,289,776			$	1,202,872			$	1,197,486			$	1,315,966			$	1,160,845
Net income (GAAP)	$	50,585			$	45,446			$	40,401			$	44,529			$	44,665			$	136,432			$	149,530
FDIC special assessment (after tax)		—				—				470				1,814				—				470				—
Core conversion expense (after tax)		1,034				940				263				—				—				2,237				—
Less gain on sale of investment securities (after tax)		—				—				—				165				—				—				287
Less gain (loss) on sales of other real estate owned (after tax)		2,375				—				(1	)			—				—				2,374				141
Net income adjusted (non-GAAP)	$	49,244			$	46,386			$	41,135			$	46,178			$	44,665			$	136,765			$	149,102
Less preferred stock dividends		938				937				938				937				938				2,813				2,813
Net income available to common shareholders adjusted (non-GAAP)	$	48,306			$	45,449			$	40,197			$	45,241			$	43,727			$	133,952			$	146,289
Return on average common equity (non-GAAP)		11.40	%			10.68	%			9.52	%			10.94	%			11.00	%			10.55	%			12.73	%
Adjusted return on average common equity (non-GAAP)		11.09	%			10.90	%			9.70	%			11.35	%			11.00	%			10.58	%			12.69	%
ROATCE (non-GAAP)		14.55	%			13.77	%			12.31	%			14.38	%			14.49	%			13.56	%			16.90	%
Adjusted ROATCE (non-GAAP)		14.16	%			14.06	%			12.53	%			14.92	%			14.49	%			13.60	%			16.85	%
Average assets	$	14,849,455			$	14,646,381			$	14,556,119			$	14,332,804			$	14,068,860			$	14,684,589			$	13,627,448
Return on average assets (GAAP)		1.36	%			1.25	%			1.12	%			1.23	%			1.26	%			1.24	%			1.47	%
Adjusted return on average assets (non-GAAP)		1.32	%			1.27	%			1.14	%			1.28	%			1.26	%			1.24	%			1.46	%
Average diluted common shares		37,483				37,540				37,597				37,554				37,520				37,547				37,493
Diluted earnings per share (GAAP)	$	1.32			$	1.19			$	1.05			$	1.16			$	1.17			$	3.56			$	3.91
Adjusted diluted earnings per share (non-GAAP)	$	1.29			$	1.21			$	1.07			$	1.20			$	1.17			$	3.57			$	3.90

	Quarter ended
($ in thousands)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024				Dec 31, 2023			Sep 30, 2023
CALCULATION OF PRE-PROVISION NET REVENUE (PPNR)
Net interest income	$	143,469		$	140,529		$	137,728			$	140,732		$	141,639
Noninterest income		21,420			15,494			12,158				25,452			12,085
FDIC special assessment		—			—			625				2,412			—
Core conversion expense		1,375			1,250			350				—			—
Less gain on sale of investment securities		—			—			—				220			—
Less gain (loss) on sales of other real estate owned		3,159			—			(2	)			—			—
Less noninterest expense		98,007			94,017			93,501				92,603			88,644
PPNR (non-GAAP)	$	65,098		$	63,256		$	57,362			$	75,773		$	65,080

	Quarter ended
($ in thousands)	Sep 30, 2024				Jun 30, 2024
CALCULATION OF ESTIMATED INSURED DEPOSITS
Estimated uninsured deposits per Call Report	$	4,180,066			$	4,020,979
Collateralized/affiliate deposits		(463,103	)			(454,084	)
Accrued interest on deposits		(5,830	)			(5,632	)
Adjusted uninsured/uncollateralized deposits		3,711,133				3,561,263
Estimated insured/collateralized deposits		8,754,189				8,721,120
Total deposits	$	12,465,322			$	12,282,383

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241021002081/en/

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

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

Source: Enterprise Financial Services Corp

FAQ

What were EFSC's Q3 2024 earnings per share?

EFSC reported earnings per share of $1.32 for Q3 2024.

How much did EFSC's net income increase in Q3 2024?

EFSC's net income increased to $50.6 million in Q3 2024.

What was the net interest margin for EFSC in Q3 2024?

EFSC's net interest margin was 4.17% in Q3 2024.

How much did EFSC's total loans increase in Q3 2024?

EFSC's total loans increased to $11.1 billion in Q3 2024.

What was EFSC's return on average assets in Q3 2024?

EFSC's return on average assets was 1.36% in Q3 2024.

How much did EFSC's noninterest income increase in Q3 2024?

EFSC's noninterest income increased to $21.4 million in Q3 2024.