EXHIBIT 99.1
For more information contact:
Jerry Mueller, Senior Vice President (314) 512-7251
Ann Marie Mayuga, AMM Communications (314) 485-9499
ENTERPRISE FINANCIAL REPORTS THIRD QUARTER 2012 RESULTS
| |
| • | Third quarter net income of $7.9 million or $0.39 per diluted share, up 36% and 34%, respectively, over prior year |
| |
| • | Commercial & Industrial loans grow 5% over linked quarter and 25% over prior year period |
| |
| • | Nonperforming assets decrease 36% from one year ago to 1.40% of total assets |
| |
| • | Net interest rate margin rises to 5.21% compared to 3.79% a year ago |
| |
| • | Noninterest-bearing demand deposits up 11% over prior year period |
St. Louis, October 25, 2012. Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company”) reported net income of $7.9 million for the quarter ended September 30, 2012, a 36% increase, compared to net income of $5.8 million for the prior year period. After deducting dividends on preferred stock, the Company reported net income of $0.39 per diluted share for the third quarter of 2012, a 34% increase, compared to net income of $0.29 per diluted share for the third quarter of 2011.
Peter Benoist, President and CEO, commented, “The positive trends in our core business gained momentum through the third quarter. The Company continues to demonstrate its ability to grow loans organically, with particular strength in Commercial & Industrial ("C&I") loans, which have increased to 44% of our portfolio. This growth is diverse and broad-based, generated by our traditionally effective sales efforts, successful recruiting initiatives, niche lending programs and our new commercial finance unit."
“The quarter was also marked by substantial progress in improving asset quality, noted Benoist. “We reduced nonperforming loans by 21% and Noncovered Other real estate by 28% in the third quarter alone. Our nonperforming asset ratio has now dropped to 1.40%. We anticipate a further reduction in nonperforming assets in the fourth quarter, which will likely be accompanied by higher reported loan losses and losses on sale of Other real estate.”
Benoist continued, “Our FDIC acquisitions again contributed significantly to our earnings results and capital account, producing another $6.6 million in net revenue in the quarter. This included the effect of an increased provision expense of $11 million for covered assets. Our loss share protection reduced the net impact to $2.2 million, which was more than offset by increased accretion and accelerated loan payments. Since our first FDIC acquisition in December 2009, covered assets have added almost $60 million in net revenue to Enterprise.”
Banking Segment
Deposits
Total deposits at September 30, 2012 were $2.6 billion, a decrease of $53.3 million, or 2%, from June 30, 2012 and $266.3 million, or 9% from the prior year period. The decrease in deposits from the linked quarter was attributable to a 9% reduction in certificates of deposit. The year over year decrease in deposits was largely comprised of a 32% reduction in higher cost certificates of deposit as the Company has planned to manage down its cost of funds.
Noninterest-bearing demand deposits declined $2.9 million in the linked quarter but increased $63.8 million, or 11%, from the prior year period and represented 24% of total deposits at September 30, 2012, up from 20% at September 30,
2011.
Loans not covered under FDIC loss share agreements ("Non-covered loans")
Portfolio loans totaled $2.0 billion at September 30, 2012, increasing $38.2 million, or 2%, in the third quarter of 2012.
The Company, which historically has been a strong C&I lender, posted a $39.0 million, or 5%, increase in C&I loans during the third quarter, the ninth consecutive quarter of growth in that lending category. C&I loans represented 44% of the Company's loan portfolio at September 30, 2012.
On a year over year basis, portfolio loans increased $119.2 million, or 6%. Of that increase, C&I loans increased $174.3 million, or 25%, since September 30, 2011, while Construction and Residential Real Estate loans decreased $37.2 million, or 11%, over the same time frame as the Company has planned to reduce its exposure to these sectors.
Asset quality for loans and other real estate not covered by loss share agreements
Nonperforming loans, including troubled debt restructurings of $4.7 million, were $32.1 million at September 30, 2012, a 21% reduction from $40.6 million at June 30, 2012 and a 33% decline from $48.0 million at September 30, 2011. During the quarter ended September 30, 2012, there were $9.8 million of additions to nonperforming loans, $4.0 million of charge-offs, $9.8 million of other principal reductions, and $4.5 million of assets transferred to other real estate.
Nonperforming loans represented 1.61% of portfolio loans at September 30, 2012, versus 2.08% of portfolio loans at June 30, 2012, and 2.57% at September 30, 2011.
Nonperforming loans by portfolio class at September 30, 2012 were as follows:
|
| | | | | | | | | | |
| (in millions) | Total portfolio | | Nonperforming | | % NPL |
Construction, Real Estate/Land Acquisition & Development | $ | 146.2 |
| | $ | 10.1 |
| | 6.91 | % |
| Commercial Real Estate - Investor Owned | 476.5 |
| | 9.6 |
| | 2.02 | % |
| Commercial Real Estate - Owner Occupied | 325.4 |
| | 5.6 |
| | 1.72 | % |
| Residential Real Estate | 146.9 |
| | 3.9 |
| | 2.65 | % |
| Commercial & Industrial | 880.4 |
| | 2.9 |
| | 0.33 | % |
| Consumer & Other | 11.7 |
| | — |
| | — | % |
| Total | $ | 1,987.1 |
| | $ | 32.1 |
| | 1.61 | % |
Excluding non-accrual loans, portfolio loans that were 30-89 days delinquent at September 30, 2012 remained at low levels, representing 0.07% of the portfolio compared to 0.13% at June 30, 2012 and 0.03% of September 30, 2011.
Other real estate totaled $12.5 million at September 30, 2012, a decrease of $4.9 million from June 30, 2012. At September 30, 2011, other real estate totaled $21.4 million. During the third quarter of 2012, the Company sold $9.0 million of other real estate, resulting in a gain of $705,000.
Nonperforming assets as a percentage of total assets represented 1.40% of total assets at September 30, 2012 compared to 1.82% at June 30, 2012 and 2.07% at September 30, 2011.
Net charge-offs in the third quarter of 2012 were $3.1 million representing an annual rate of 0.64% of average loans, compared to net charge-offs of $1.4 million, an annualized rate of 0.28% of average loans, in the linked second quarter and $4.7 million, an annualized rate of 1.01% of average loans, in the third quarter of 2011. The Company expects fourth quarter net chargeoffs of up to $8 million as efforts continue to lower classified loan levels.
Provision for loan losses was $1.0 million in the third quarter of 2012, compared to $75,000 in the second quarter of 2012 and $5.4 million in the third quarter of 2011. The lower loan loss provision in the third quarter of 2012 compared to the the third quarter of 2011 was due to a lower number of loan risk rating downgrades, and more favorable loss migration statistics from a year ago. The Company expects the fourth quarter provision to be $2 million to $4 million as the risk of further risk rating downgrades remains elevated, especially for certain real estate related credits.
The Company's allowance for loan losses was 1.72% of loans at September 30, 2012, representing 107% of nonperforming loans.
Loans and other real estate covered under FDIC loss share agreements
Loans covered under FDIC loss share agreements ("Covered loans") totaled $221.4 million at September 30, 2012, a decrease of $21.1 million, or 9%, from the linked second quarter primarily as a result of principal paydowns.
Other real estate at September 30, 2012 was reduced to $18.8 million, a 5% decrease from $19.8 million at June 30, 2012. During the third quarter of 2012, the Company sold $2.6 million of other real estate, resulting in a gain of $34,000.
The Company remeasures contractual and expected cashflows on a quarterly basis. When the remeasurement process results in a decrease in expected cash flows due to an increase in expected credit losses, impairment is recorded. Concurrently, the FDIC loss share receivable is increased to reflect anticipated future cash to be received from the FDIC. The amount of the increase is determined based on the specific loss share agreement, but is generally 80% of the losses. In the third quarter of 2012, impairments totaling $10.9 million were recorded for certain loan pools covered under loss share compared to $2.7 million in the third quarter of 2011. The charge was partially offset through noninterest income by an increase in the FDIC loss share receivable totaling approximately $8.7 million, reducing the net impact of the provision to $2.2 million.
Unplanned cash flows representing accelerated loan payoffs or paydowns are recognized as income, but also generally result in a decrease in the FDIC loss share receivable. These cash flows are, by their nature, unpredictable and can vary significantly period to period. Unplanned cash flows in the third quarter totaled $7.4 million, which were partially offset by a decrease in the FDIC loss share receivable.
The following table illustrates the net revenue contribution of covered assets for the most recent five quarters.
|
| | | | | | | | | | | | | | | | | | | |
| | For the Quarter ended |
| (in thousands) | September 30, 2012 | | June 30, 2012 | | March 31, 2012 | | December 31, 2011 | | September 30, 2011 |
| Accretion income | $ | 7,995 |
| | $ | 7,155 |
| | $ | 7,081 |
| | $ | 6,841 |
| | $ | 4,942 |
|
| Accelerated cash flows | 7,446 |
| | 5,315 |
| | 2,691 |
| | 4,733 |
| | 1,620 |
|
| Other | 103 |
| | 106 |
| | 130 |
| | 29 |
| | 4 |
|
| Total interest income | 15,544 |
| | 12,576 |
| | 9,902 |
| | 11,603 |
| | 6,566 |
|
| Provision for loan losses | (10,889 | ) | | (206 | ) | | (2,285 | ) | | 144 |
| | (2,672 | ) |
| Gain on sale of other real estate | 34 |
| | 769 |
| | 1,173 |
| | 144 |
| | 588 |
|
| Change in FDIC loss share receivable | 1,912 |
| | (5,694 | ) | | (2,956 | ) | | (4,642 | ) | | 1,513 |
|
| Pre-tax net revenue | $ | 6,601 |
| | $ | 7,445 |
| | $ | 5,834 |
| | $ | 7,249 |
| | $ | 5,995 |
|
Net Interest Income
Net interest income for the banking segment in the third quarter increased $3.4 million from the linked second quarter, primarily due to higher accretion and accelerated cash flows in the Covered loans. On a year over year basis, net interest income increased $10.5 million, or 37%. Including the effect of parent company debt, the net interest rate margin was 5.21% for the third quarter of 2012, compared to 4.81% for the second quarter of 2012 and 3.79% in the third quarter of 2011. In the third quarter of 2012, Covered loans yielded 26.51%, including effects of accelerated discount accretion due to cash flows on paid off Covered loans. Excluding the accelerated cash flow impacts, the Covered loans yielded 13.6% in the third quarter and are expected to yield 13% to 15% in the fourth quarter.
Absent Covered loans, and the related nonearning assets, the net interest rate margin was 3.42% for the third quarter of 2012 compared to 3.46% for the second quarter of 2012.
Wealth Management Segment
Fee income attributable to the Wealth Management segment includes Wealth Management revenue and income from state tax credit brokerage activities. Third quarter Wealth Management revenues of $1.8 million were $166,000, or 8%, lower than the linked quarter and equal to the prior year period.
Trust assets under administration were $1.6 billion at September 30, 2012, compared to $1.6 billion at June 30, 2012 and $1.4 billion at September 30, 2011.
Gains from state tax credit brokerage activities, net of fair value marks on tax credit assets and related interest rate hedges, were $256,000 for the third quarter of 2012, compared to $587,000 for the linked quarter and $1,368,000 in the third quarter of 2011. Sales of state tax credits can vary by quarter depending on client demand.
Other Business Results
Total capital to risk-weighted assets was 14.12% at September 30, 2012 compared to 13.88% at June 30, 2012 and 13.70% at September 30, 2011. The tangible common equity ratio was 6.19% at September 30, 2012 versus 5.84% at June 30, 2012 and 4.88% at September 30, 2011. The Company's Tier 1 common equity ratio was 7.91% at September 30, 2012 compared to 7.62% at June 30, 2012 and 7.16% at September 30, 2011. The Company believes that the tangible common equity and the Tier 1 common equity ratios are important financial measures of capital strength even though they are considered to be non-GAAP measures and are not part of the regulatory capital requirements to which the Company is subject. The attached tables contain a reconciliation of these ratios to U.S. GAAP.
Noninterest expenses were $21.3 million for the quarter ended September 30, 2012, compared to $21.4 million for the quarter ended June 30, 2012 and $18.3 million for the quarter ended September 30, 2011. The increase over the prior year period was primarily due to increases in salaries and benefits, occupancy, data processing and other operating expenses related to the 2011 acquisitions.
The Company's efficiency ratio was 47.0% for the quarter ended September 30, 2012 compared to 61.2% for quarter ended June 30, 2012 and 51.6% for the prior year period. The decrease in the efficiency ratio is primarily a result of increases in non-interest income from the Change in FDIC loss share receivable.
The Company will host a conference call at 2:30 p.m. CDT on Thursday, October 25, 2012. During the call, management will address the third quarter of 2012 results. The call will be accessible on Enterprise Financial Services Corp's home page, at www.enterprisebank.com under “Investor Relations” and by telephone at 1-888-285-8004 (Conference ID #29363261.) Recorded replays of the conference call will be available on the website beginning two hours after the call's completion. The replay will be available for approximately two weeks following the conference call.
Enterprise Financial Services Corp operates commercial banking and wealth management businesses in metropolitan St. Louis, Kansas City, and Phoenix. The Company is primarily focused on serving the needs of privately held businesses, their owner families, executives and professionals.
# # #
Readers should note that in addition to the historical information contained herein, this press release contains forward-looking statements, which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. We use the words “expect” and “intend” and variations of such words and similar expressions in this communication to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, burdens imposed by federal and state regulations of banks, credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to local and national economic conditions, risks associated with rapid increase or decrease in prevailing interest rates, effects of mergers and acquisitions, effects of critical accounting policies and judgments, legal and regulatory developments and competition from banks and other financial institutions, as well as other risk factors described in the Company's 2011 Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events unless required under the federal securities laws.
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
|
| | | | | | | | | | | | | | | |
| | For the Quarter ended | | For the Nine Months ended |
| (in thousands, except per share data) | Sep 30,
2012 | | Sep 30,
2011 | | Sep 30,
2012 | | Sep 30,
2011 |
| INCOME STATEMENTS | | | | | | | |
| NET INTEREST INCOME | | | | | | | |
| Total interest income | $ | 42,874 |
| | $ | 34,285 |
| | $ | 120,118 |
| | $ | 103,377 |
|
| Total interest expense | 5,390 |
| | 7,516 |
| | 17,872 |
| | 22,896 |
|
| Net interest income | 37,484 |
| | 26,769 |
| | 102,246 |
| | 80,481 |
|
| Provision for loan losses not covered under FDIC loss share | 1,048 |
| | 5,400 |
| | 2,841 |
| | 13,300 |
|
| Provision for loan losses covered under FDIC loss share | 10,889 |
| | 2,672 |
| | 13,380 |
| | 2,947 |
|
| Net interest income after provision for loan losses | 25,547 |
| | 18,697 |
| | 86,025 |
| | 64,234 |
|
| | | | | | | | |
| NONINTEREST INCOME | | | | | | | |
| Wealth Management revenue | 1,825 |
| | 1,832 |
| | 5,525 |
| | 5,173 |
|
| Deposit service charges | 1,456 |
| | 1,332 |
| | 4,199 |
| | 3,663 |
|
| Gain on sale of other real estate | 739 |
| | 517 |
| | 3,152 |
| | 1,039 |
|
| State tax credit activity, net | 256 |
| | 1,368 |
| | 1,180 |
| | 2,510 |
|
| Gain on sale of investment securities | — |
| | 768 |
| | 1,156 |
| | 1,448 |
|
| Change in FDIC loss share receivable | 1,912 |
| | 1,513 |
| | (6,738 | ) | | 1,148 |
|
| Other income | 1,644 |
| | 1,396 |
| | 4,186 |
| | 2,926 |
|
| Total noninterest income | 7,832 |
| | 8,726 |
| | 12,660 |
| | 17,907 |
|
| | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | |
| Employee compensation and benefits | 11,441 |
| | 9,329 |
| | 32,956 |
| | 26,282 |
|
| Occupancy | 1,399 |
| | 1,306 |
| | 4,162 |
| | 3,586 |
|
| Furniture and equipment | 384 |
| | 431 |
| | 1,234 |
| | 1,216 |
|
| Other | 8,058 |
| | 7,236 |
| | 25,708 |
| | 23,207 |
|
| Total noninterest expenses | 21,282 |
| | 18,302 |
| | 64,060 |
| | 54,291 |
|
| | | | | | | | |
| Income before income tax expense | 12,097 |
| | 9,121 |
| | 34,625 |
| | 27,850 |
|
| Income tax expense | 4,167 |
| | 3,289 |
| | 11,744 |
| | 9,633 |
|
| Net income | 7,930 |
| | 5,832 |
| | 22,881 |
| | 18,217 |
|
| Dividends on preferred stock | (648 | ) | | (632 | ) | | (1,933 | ) | | (1,888 | ) |
| Net income available to common shareholders | $ | 7,282 |
| | $ | 5,200 |
| | $ | 20,948 |
| | $ | 16,329 |
|
| | | | | | | | |
| Basic earnings per share | $ | 0.41 |
| | $ | 0.29 |
| | $ | 1.17 |
| | $ | 1.00 |
|
| Diluted earnings per share | $ | 0.39 |
| | $ | 0.29 |
| | $ | 1.14 |
| | $ | 0.98 |
|
| Return on average assets | 0.91 | % | | 0.65 | % | | 0.87 | % | | 0.73 | % |
| Return on average common equity | 12.62 | % | | 10.39 | % | | 12.73 | % | | 12.61 | % |
| Efficiency ratio | 46.96 | % | | 51.56 | % | | 55.75 | % | | 55.18 | % |
| Noninterest expenses to average assets | 2.66 | % | | 2.28 | % | | 2.66 | % | | 2.42 | % |
| | | | | | | | |
| YIELDS (fully tax equivalent) | | | | | | | |
| Loans not covered under FDIC loss share | 5.00 | % | | 5.33 | % | | 5.13 | % | | 5.42 | % |
| Loans covered under FDIC loss share | 26.51 | % | | 10.16 | % | | 19.95 | % | | 13.94 | % |
| Total portfolio loans | 7.29 | % | | 5.91 | % | | 6.86 | % | | 6.29 | % |
| Securities | 2.01 | % | | 2.60 | % | | 2.00 | % | | 2.72 | % |
| Federal funds sold | 0.23 | % | | 0.27 | % | | 0.24 | % | | 0.26 | % |
| Yield on interest-earning assets | 5.96 | % | | 4.84 | % | | 5.62 | % | | 5.17 | % |
| Interest-bearing deposits | 0.72 | % | | 1.01 | % | | 0.79 | % | | 1.09 | % |
| Subordinated debt | 4.59 | % | | 5.26 | % | | 4.88 | % | | 5.30 | % |
| Borrowed funds | 1.49 | % | | 1.94 | % | | 1.65 | % | | 1.94 | % |
| Cost of paying liabilities | 0.95 | % | | 1.23 | % | | 1.02 | % | | 1.32 | % |
| Net interest spread | 5.01 | % | | 3.61 | % | | 4.60 | % | | 3.85 | % |
| Net interest rate margin | 5.21 | % | | 3.79 | % | | 4.79 | % | | 4.04 | % |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
|
| | | | | | | | | | | | | | | | | | | |
| | At the Quarter ended |
| (in thousands, except per share data) | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 | | Dec 31,
2011 | | Sep 30,
2011 |
| BALANCE SHEETS | | | | | | | | | |
| | | | | | | | | | |
| ASSETS | | | | | | | | | |
| Cash and due from banks | $ | 28,964 |
| | $ | 29,832 |
| | $ | 27,595 |
| | $ | 20,791 |
| | $ | 26,015 |
|
| Federal funds sold | 30 |
| | 58 |
| | 77 |
| | 143 |
| | 2,371 |
|
| Interest-bearing deposits | 57,681 |
| | 47,589 |
| | 149,000 |
| | 168,711 |
| | 240,488 |
|
| Debt and equity investments | 626,719 |
| | 614,237 |
| | 520,642 |
| | 607,709 |
| | 477,131 |
|
| Loans held for sale | 8,245 |
| | 4,928 |
| | 5,813 |
| | 6,494 |
| | 5,076 |
|
| | | | | | | | | | |
| Portfolio loans not covered under FDIC loss share | 1,987,166 |
| | 1,948,994 |
| | 1,917,550 |
| | 1,897,074 |
| | 1,867,956 |
|
| Less: Allowance for loan losses | 34,222 |
| | 36,304 |
| | 37,596 |
| | 37,989 |
| | 42,883 |
|
| Portfolio loans not covered under FDIC loss share, net | 1,952,944 |
| | 1,912,690 |
| | 1,879,954 |
| | 1,859,085 |
| | 1,825,073 |
|
| Portfolio loans covered under FDIC loss share, net of the allowance for loan losses | 210,331 |
| | 240,599 |
| | 266,239 |
| | 298,975 |
| | 324,374 |
|
| Portfolio loans, net | 2,163,275 |
| | 2,153,289 |
| | 2,146,193 |
| | 2,158,060 |
| | 2,149,447 |
|
| | | | | | | | | | |
| Other real estate not covered under FDIC loss share | 12,549 |
| | 17,443 |
| | 19,655 |
| | 17,217 |
| | 21,370 |
|
| Other real estate covered under FDIC loss share | 18,810 |
| | 19,832 |
| | 25,725 |
| | 36,471 |
| | 51,193 |
|
| Premises and equipment, net | 21,469 |
| | 21,739 |
| | 21,543 |
| | 18,986 |
| | 18,976 |
|
| State tax credits, held for sale | 65,873 |
| | 65,648 |
| | 48,165 |
| | 50,446 |
| | 56,278 |
|
| FDIC loss share receivable | 75,851 |
| | 88,436 |
| | 172,497 |
| | 184,554 |
| | 194,216 |
|
| Goodwill | 30,334 |
| | 30,334 |
| | 30,334 |
| | 30,334 |
| | 30,334 |
|
| Core deposit intangible | 7,846 |
| | 8,310 |
| | 8,795 |
| | 9,285 |
| | 9,471 |
|
| Other assets | 76,046 |
| | 81,459 |
| | 69,120 |
| | 68,578 |
| | 66,418 |
|
| Total assets | $ | 3,193,692 |
| | $ | 3,183,134 |
| | $ | 3,245,154 |
| | $ | 3,377,779 |
| | $ | 3,348,784 |
|
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | |
| Noninterest-bearing deposits | $ | 621,070 |
| | $ | 623,956 |
| | $ | 592,172 |
| | $ | 585,479 |
| | $ | 557,290 |
|
| Interest-bearing deposits | 1,929,863 |
| | 1,980,317 |
| | 2,111,985 |
| | 2,205,874 |
| | 2,259,972 |
|
| Total deposits | 2,550,933 |
| | 2,604,273 |
| | 2,704,157 |
| | 2,791,353 |
| | 2,817,262 |
|
| Subordinated debentures | 85,081 |
| | 85,081 |
| | 85,081 |
| | 85,081 |
| | 85,081 |
|
| FHLB advances | 126,000 |
| | 90,500 |
| | 87,000 |
| | 102,000 |
| | 102,000 |
|
| Other borrowings | 147,104 |
| | 132,479 |
| | 105,888 |
| | 154,545 |
| | 100,729 |
|
| Other liabilities | 17,058 |
| | 14,913 |
| | 17,012 |
| | 5,235 |
| | 9,241 |
|
| Total liabilities | 2,926,176 |
| | 2,927,246 |
| | 2,999,138 |
| | 3,138,214 |
| | 3,114,313 |
|
| Shareholders' equity | 267,516 |
| | 255,888 |
| | 246,016 |
| | 239,565 |
| | 234,471 |
|
| Total liabilities and shareholders' equity | $ | 3,193,692 |
| | $ | 3,183,134 |
| | $ | 3,245,154 |
| | $ | 3,377,779 |
| | $ | 3,348,784 |
|
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
|
| | | | | | | | | | | | | | | | | | | |
| | For the Quarter ended |
| (in thousands, except per share data) | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 | | Dec 31,
2011 | | Sep 30,
2011 |
| EARNINGS SUMMARY | | | | | | | | | |
| Net interest income | $ | 37,484 |
| | $ | 34,133 |
| | $ | 30,629 |
| | $ | 32,204 |
| | $ | 26,769 |
|
| Provision for loan losses not covered under FDIC loss share | 1,048 |
| | 75 |
| | 1,718 |
| | — |
| | 5,400 |
|
| Provision for loan losses covered under FDIC loss share | 10,889 |
| | 206 |
| | 2,285 |
| | (144 | ) | | 2,672 |
|
| Wealth Management revenue | 1,825 |
| | 1,991 |
| | 1,709 |
| | 1,668 |
| | 1,832 |
|
| Noninterest income | 6,007 |
| | (1,146 | ) | | 2,274 |
| | (1,067 | ) | | 6,894 |
|
| Noninterest expense | 21,282 |
| | 21,414 |
| | 21,364 |
| | 23,427 |
| | 18,302 |
|
| Income before income tax expense | 12,097 |
| | 13,283 |
| | 9,245 |
| | 9,522 |
| | 9,121 |
|
| Net income | 7,930 |
| | 8,766 |
| | 6,185 |
| | 7,206 |
| | 5,832 |
|
| Net income available to common shareholders | 7,282 |
| | 8,122 |
| | 5,544 |
| | 6,570 |
| | 5,200 |
|
| Diluted earnings per share | $ | 0.39 |
| | $ | 0.44 |
| | $ | 0.31 |
| | $ | 0.36 |
| | $ | 0.29 |
|
| Return on average common equity | 12.62 | % | | 14.99 | % | | 10.54 | % | | 12.81 | % | | 10.39 | % |
| Net interest rate margin (fully tax equivalent) | 5.21 | % | | 4.81 | % | | 4.33 | % | | 4.35 | % | | 3.79 | % |
| Efficiency ratio | 46.96 | % | | 61.22 | % | | 61.73 | % | | 71.41 | % | | 51.56 | % |
| MARKET DATA | | | | | | | | | |
| Book value per common share | $ | 13.00 |
| | $ | 12.44 |
| | $ | 11.94 |
| | $ | 11.61 |
| | $ | 11.35 |
|
| Tangible book value per common share | $ | 10.88 |
| | $ | 10.28 |
| | $ | 9.74 |
| | $ | 9.38 |
| | $ | 9.11 |
|
| Market value per share | $ | 13.60 |
| | $ | 10.96 |
| | $ | 11.74 |
| | $ | 14.80 |
| | $ | 13.59 |
|
| Period end common shares outstanding | 17,964 |
| | 17,857 |
| | 17,796 |
| | 17,774 |
| | 17,743 |
|
| Average basic common shares | 17,876 |
| | 17,833 |
| | 17,790 |
| | 17,754 |
| | 17,741 |
|
| Average diluted common shares | 19,415 |
| | 19,286 |
| | 19,243 |
| | 19,226 |
| | 19,202 |
|
| ASSET QUALITY | | | | | | | | | |
| Net charge-offs | $ | 3,130 |
| | $ | 1,367 |
| | $ | 2,111 |
| | $ | 4,894 |
| | $ | 4,674 |
|
| Nonperforming loans | 32,058 |
| | 40,555 |
| | 47,184 |
| | 41,622 |
| | 48,038 |
|
| Nonperforming loans to total loans | 1.61 | % | | 2.08 | % | | 2.46 | % | | 2.19 | % | | 2.57 | % |
| Nonperforming assets to total assets* | 1.40 | % | | 1.82 | % | | 2.06 | % | | 1.74 | % | | 2.07 | % |
| Allowance for loan losses to total loans | 1.72 | % | | 1.86 | % | | 1.96 | % | | 2.00 | % | | 2.30 | % |
| Net charge-offs to average loans (annualized) | 0.64 | % | | 0.28 | % | | 0.45 | % | | 1.04 | % | | 1.01 | % |
| | | | | | | | | | |
| CAPITAL | | | | | | | | | |
| Tier 1 capital to risk-weighted assets | 12.75 | % | | 12.51 | % | | 12.48 | % | | 12.40 | % | | 12.24 | % |
| Total capital to risk-weighted assets | 14.12 | % | | 13.88 | % | | 13.85 | % | | 13.78 | % | | 13.70 | % |
| Tier 1 common equity to risk-weighted assets | 7.91 | % | | 7.62 | % | | 7.46 | % | | 7.32 | % | | 7.16 | % |
| Tangible common equity to tangible assets | 6.19 | % | | 5.84 | % | | 5.41 | % | | 4.99 | % | | 4.88 | % |
| | | | | | | | | | |
| AVERAGE BALANCES | | | | | | | | | |
| Portfolio loans not covered under FDIC loss share | $ | 1,949,181 |
| | $ | 1,931,903 |
| | $ | 1,891,883 |
| | $ | 1,872,282 |
| | $ | 1,835,634 |
|
| Portfolio loans covered under FDIC loss share | 233,272 |
| | 250,965 |
| | 279,700 |
| | 314,948 |
| | 256,381 |
|
| Loans held for sale | 6,376 |
| | 5,547 |
| | 5,848 |
| | 4,886 |
| | 2,857 |
|
| Earning assets | 2,889,968 |
| | 2,881,915 |
| | 2,877,252 |
| | 2,970,992 |
| | 2,834,690 |
|
| Total assets | 3,187,999 |
| | 3,214,013 |
| | 3,266,856 |
| | 3,385,845 |
| | 3,190,490 |
|
| Deposits | 2,598,506 |
| | 2,668,428 |
| | 2,707,042 |
| | 2,838,536 |
| | 2,661,978 |
|
| Shareholders' equity | 263,363 |
| | 251,491 |
| | 244,944 |
| | 236,548 |
| | 231,538 |
|
| | | | | | | | | | |
| LOAN PORTFOLIO | | | | | | | | | |
| Commercial and industrial | $ | 880,394 |
| | $ | 841,383 |
| | $ | 792,055 |
| | $ | 763,202 |
| | $ | 706,117 |
|
| Commercial real estate | 801,880 |
| | 801,983 |
| | 806,997 |
| | 811,570 |
| | 818,578 |
|
| Construction real estate | 146,236 |
| | 142,474 |
| | 148,494 |
| | 140,147 |
| �� | 152,464 |
|
| Residential real estate | 146,940 |
| | 149,410 |
| | 157,706 |
| | 171,034 |
| | 177,871 |
|
| Consumer and other | 11,716 |
| | 13,744 |
| | 12,298 |
| | 11,121 |
| | 12,926 |
|
| Portfolio loans covered under FDIC loss share | 221,433 |
| | 242,488 |
| | 269,249 |
| | 300,610 |
| | 326,942 |
|
| Total loan portfolio | $ | 2,208,599 |
| | $ | 2,191,482 |
| | $ | 2,186,799 |
| | $ | 2,197,684 |
| | $ | 2,194,898 |
|
| | | | | | | | | | |
| * Excludes ORE covered by FDIC shared-loss agreements, except for their inclusion in total assets. | | |
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
|
| | | | | | | | | | | | | | | | | | | |
| | For the Quarter ended |
| (in thousands) | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 | | Dec 31,
2011 | | Sep 30,
2011 |
| DEPOSIT PORTFOLIO | | | | | | | | | |
| Noninterest-bearing accounts | $ | 621,070 |
| | $ | 623,956 |
| | $ | 592,172 |
| | $ | 585,479 |
| | $ | 557,290 |
|
| Interest-bearing transaction accounts | 259,902 |
| | 275,288 |
| | 265,604 |
| | 253,504 |
| | 241,815 |
|
| Money market and savings accounts | 1,056,768 |
| | 1,027,655 |
| | 1,126,756 |
| | 1,135,449 |
| | 1,117,232 |
|
| Certificates of deposit | 613,193 |
| | 677,374 |
| | 719,625 |
| | 816,921 |
| | 900,925 |
|
| Total deposit portfolio | $ | 2,550,933 |
| | $ | 2,604,273 |
| | $ | 2,704,157 |
| | $ | 2,791,353 |
| | $ | 2,817,262 |
|
| | | | | | | | | | |
| YIELDS (fully tax equivalent) | | | | | | | | | |
| Loans not covered under FDIC loss share | 5.00 | % | | 5.17 | % | | 5.23 | % | | 5.31 | % | | 5.33 | % |
| Loans covered under FDIC loss share | 26.51 | % | | 20.15 | % | | 14.24 | % | | 14.62 | % | | 10.16 | % |
| Total portfolio loans | 7.29 | % | | 6.89 | % | | 6.39 | % | | 6.65 | % | | 5.91 | % |
| Securities | 2.01 | % | | 1.96 | % | | 2.04 | % | | 2.10 | % | | 2.60 | % |
| Federal funds sold | 0.23 | % | | 0.23 | % | | 0.25 | % | | 0.24 | % | | 0.27 | % |
| Yield on interest-earning assets | 5.96 | % | | 5.63 | % | | 5.25 | % | | 5.32 | % | | 4.84 | % |
| Interest-bearing deposits | 0.72 | % | | 0.79 | % | | 0.84 | % | | 0.90 | % | | 1.01 | % |
| Subordinated debt | 4.59 | % | | 4.63 | % | | 5.43 | % | | 5.32 | % | | 5.26 | % |
| Borrowed funds | 1.49 | % | | 1.70 | % | | 1.76 | % | | 1.84 | % | | 1.94 | % |
| Cost of paying liabilities | 0.95 | % | | 1.01 | % | | 1.08 | % | | 1.12 | % | | 1.23 | % |
| Net interest spread | 5.01 | % | | 4.62 | % | | 4.17 | % | | 4.20 | % | | 3.61 | % |
| Net interest rate margin | 5.21 | % | | 4.81 | % | | 4.33 | % | | 4.35 | % | | 3.79 | % |
| | | | | | | | | | |
| WEALTH MANAGEMENT | | | | | | | | | |
| Trust Assets under management | $ | 846,532 |
| | $ | 836,351 |
| | $ | 840,081 |
| | $ | 831,931 |
| | $ | 790,129 |
|
| Trust Assets under administration | 1,637,278 |
| | 1,601,441 |
| | 1,666,943 |
| | 1,602,969 |
| | 1,439,947 |
|
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
RECONCILIATIONS OF U.S. GAAP FINANCIAL MEASURES
|
| | | | | | | | | | | | | | | | | | | |
| | At the Quarter Ended |
| (In thousands) | Sep 30
2012 | | Jun 30
2012 | | Mar 31
2012 | | Dec 31
2011 | | Sep 30
2011 |
| TIER 1 COMMON EQUITY TO RISK-WEIGHTED ASSETS |
| | | | | | | | | | |
| Shareholders' equity | $ | 267,516 |
| | $ | 255,888 |
| | $ | 246,016 |
| | $ | 239,565 |
| | $ | 234,471 |
|
| Less: Goodwill | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) |
| Less: Intangible assets | (7,846 | ) | | (8,310 | ) | | (8,795 | ) | | (9,285 | ) | | (9,471 | ) |
| Less: Unrealized gains | (9,388 | ) | | (6,140 | ) | | (4,744 | ) | | (3,602 | ) | | (4,718 | ) |
| Plus: Qualifying trust preferred securities | 80,100 |
| | 80,100 |
| | 80,100 |
| | 79,874 |
| | 78,177 |
|
| Other | 56 |
| | 56 |
| | 57 |
| | 57 |
| | 59 |
|
| Tier 1 capital | $ | 300,104 |
| | $ | 291,260 |
| | $ | 282,300 |
| | $ | 276,275 |
| | $ | 268,184 |
|
| Less: Preferred stock | (33,914 | ) | | (33,703 | ) | | (33,496 | ) | | (33,293 | ) | | (33,094 | ) |
| Less: Qualifying trust preferred securities | (80,100 | ) | | (80,100 | ) | | (80,100 | ) | | (79,874 | ) | | (78,177 | ) |
| Tier 1 common equity | $ | 186,090 |
| | $ | 177,457 |
| | $ | 168,704 |
| | $ | 163,108 |
| | $ | 156,913 |
|
| | | | | | | | | | |
| Total risk weighted assets determined in accordance with prescribed regulatory requirements | $ | 2,353,251 |
| | $ | 2,327,624 |
| | $ | 2,262,209 |
| | $ | 2,227,958 |
| | $ | 2,190,880 |
|
| | | | | | | | | | |
| Tier 1 common equity to risk weighted assets | 7.91 | % | | 7.62 | % | | 7.46 | % | | 7.32 | % | | 7.16 | % |
| | | | | | | | | | |
| SHAREHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS |
| | | | | | | | | | |
| Shareholders' equity | $ | 267,516 |
| | $ | 255,888 |
| | $ | 246,016 |
| | $ | 239,565 |
| | $ | 234,471 |
|
| Less: Preferred stock | (33,914 | ) | | (33,703 | ) | | (33,496 | ) | | (33,293 | ) | | (33,094 | ) |
| Less: Goodwill | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) |
| Less: Intangible assets | (7,846 | ) | | (8,310 | ) | | (8,795 | ) | | (9,285 | ) | | (9,471 | ) |
| Tangible common equity | $ | 195,422 |
| | $ | 183,541 |
| | $ | 173,391 |
| | $ | 166,653 |
| | $ | 161,572 |
|
| | | | | | | | | | |
| Total assets | $ | 3,193,692 |
| | $ | 3,183,134 |
| | $ | 3,245,154 |
| | $ | 3,377,779 |
| | $ | 3,348,784 |
|
| Less: Goodwill | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) | | (30,334 | ) |
| Less: Intangible assets | (7,846 | ) | | (8,310 | ) | | (8,795 | ) | | (9,285 | ) | | (9,471 | ) |
| Tangible assets | $ | 3,155,512 |
| | $ | 3,144,490 |
| | $ | 3,206,025 |
| | $ | 3,338,160 |
| | $ | 3,308,979 |
|
| | | | | | | | | | |
| Tangible common equity to tangible assets | 6.19 | % | | 5.84 | % | | 5.41 | % | | 4.99 | % | | 4.88 | % |
