EFSC - Earnings call transcript Q4 2021 | Enterprise Financial Services Corp

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. And welcome to the EFSC Earnings Conference Call. Today’s conference is being recorded. And at this time, I’d like to turn the conference over to Jim Lally, President and CEO. Please go ahead, sir.

Jim Lally

and Catherine, you, thank good morning. Well, everyone welcome to our Call. Earnings Quarter Fourth I of to Chief taking me appreciate & Scott you I all Enterprise of time Chief Officer; is Bank Turner, Goodman, President and this Keene listen our Officer company’s Financial Trust. Operating and morning joining and

Please Form furnished on and XX-K to earnings Before the two presentation actual accompanying release like diluted Forward-Looking net of reported $XX for on turn SEC both earnings and year another on our million The call quarters and remind was on X-K found highlights any presentation website. of to the of make slide why may our begin, from yesterday. were performance. we three charges. Please or our $X.XX quarter. and refer would for that forward-looking the for fourth prior year were impairment proud slide outstanding the share. This presentation share titled we fourth release the and statements results to especially can income reasons merger for and our quarter Statements everyone I per may vary of earned favorably as this financial linked recent a XXXX for of that be adjusted our and We EFSC. most to XX-Q copy morning. We compared per

return as posted of impressive, were on assets return Our net equally and we revenue of average metrics X.XX%. X.XX% pre-provision

continue for should loan variable call attention addition have non-interest-bearing portfolio would expect expected Keene production all base experienced for million solid results we’ve This us strong quarterly results into Our coupled to rate to increases. details provide momentum pre-provision I continued experienced the in performance. $XX from deposit to. much is will well several How revenue what third record million, came these at momentum our strong quarters and your on quarter. to results positioned interest provide rate as XXXX $X these we like a our should set loan that net this about for of with XXXX. more last our increasing I’d

several stream building towards have focused our on the commercial oriented intentionally last revenue diversified banking a we years, heritage. Over

St. wage Our ratio of has diversify and this our and been branches of types more in Los of balance have San Phoenix. a XXXX how businesses. to comment $XXX we yielding make and new geography relative One sheet continue other loan-to-deposit inflationary -- deposits Choice Seacoast to acquisitions markets and this model. of over billion, County Angeles, in deposit strategy Louis, that Kansas of a loans as At $XX.X like both through us total complementing several a serve would business the for year average we trends. With now Diego, was total billion growing with markets and of First First Choice $X fully lines, XX%. bolsters integrated, relates illustrates branch-light our final I we national will end, established along established and our are doing City XX further in amid This Orange added million. well to more The XXXX to to

than significantly equity enhancing build profile is Furthermore, represents much on also continue and our XX%. improved into -- deposits linked stronger tangible total significantly either of our dig More close with look importantly, What have continue loan-to-deposit provide to much ratio five remained illustrates model close our years, to a much various subsequent and differentiated the non-interest-bearing detail our previously when we businesses that’s owner build. the that XX/XX/XX, same regions, our to that to return we XXX%, were, our businesses, This towards on we growth the more was though, strong the when company loan while will At and value profile. C&I, overall XX%. is earner to equity, quarter. of are compared loan-to-deposit when the Scott common you when back of ratio our approximately specialty portfolio oriented at at product lines, funding on our while you deposits XX% CRE is a time, return seeing. which this further, while production common to we XX% occupied the lowering tangible and we risk

is know managers teach long-term. relationship and reward We the the repeatable, choose and consistent sales quick that process success Our from responses. simple relationships and focus expertise greatest us on that leaders that and sales our for is and a comes consultative our

on We’re businesses know remains any on not for not business. strong this statistics by quality please us, take right evidenced as Credit just But focused that do this the the listed for we granted. page.

metrics. our are comment us the we expect that for extremely Our to will environment both. sheet just is organic Efficient capital the we the time already whether management very growth positive credit during from teams the come, more current in of situated through spend acquisitions, Keene our positioned in positioned have many moves on that the part balance I is well this used that quarter. well goal. made or years sound on area to credit we this improve has well for and

During core successfully process significant the sales we as integration and integration our made systems have of First Choice our in well. completed quarter, cultural fourth progress and

very market talent in what this markets results been combine associates, knowhow. how in successful our from of with do excited we have we new We and XXXX, legacy acquisition about crossed numbers with the in with these Enterprise when has year. provided further of markets benefit, diversifies markets wonderful in merge second half our in the terrific us as show the in has can likely and with I’m given markets newer to base. integration financial This a us mark, significant billion up our revenue $XX platform a we local

particularly XXXX. slide in the will to on items we see are on that four, Moving you focused of list

teams deposit our their on loan, relationship new keenly goals have XXXX. focused for and net We

this Scott will has As continue. our we the and to expect solid throughout comment, production company been

production year Our had in team a SBA XXXX. record

We expect continue, portfolio. to with some to respect existing pressure refinancing level achievement this but of of the expect

team stemming this focused this by it We addressing makes on a sense. have additionally where tide preemptively

in this markets continue in talent current to with markets. specialty will teams will new Like we We leverage credit to and relationships. new growth invest higher new allocations, our for businesses, with along past garner bolstering tax

us. true affordable new new when We market have penetration prolific. well. should also of program found use is for business especially is as This enter markets where differentiator this we a We see significant our housing for now this

our turn is the hybrid out Scott? that, but implemented Goodman. first call strategy, to Scott look we early to will now rolling Omicron fully or delayed this I over the With Finally, quarter second. forward later in

Scott Goodman

Thank you, and good Jim, everybody. morning,

increase totaled addition As strong the billion, was most across of $XXX through as XX.X% you’ll bolstered modest as in see on year relationships reduction for of over which representing in million six book end the well of five, performance First Slide addition books experienced business growth a year just core performance Choice line, the organic Board year. of well slide of posted of a usage $X the by was The lines of loans net the while rebound new legacy growth the our prior notably, legacy QX, core we lines. balances. from revolving at growth in we the and across or impacted annual heavily in full C&I reflects X.X%. business a specialty Most the PPP the diversified the

PPP slide balances. on seven, million is detailed number growth which For the quarter, $XX of achieve impact net the of we before

sales as up businesses produce onboard lines actively well C&I Our as our quarter. process over more credit. from using healthy deal focus clients, revolving continues balances flow, the the total to XX% of new prior as we grew originations

roughly with closing XX While still million. throughout $XXX usage $XX levels quarter, annualized. record robust pre-pandemic units had X%. over in Sponsor the or average another with by and and of had $XXX net quarter rose growth million quarter new companies draws Specialized posting finance growing our lending different commitments steadily million XX% a an below up line

programs resulting this these into the prior category with the and permanent sponsor Tax and this is in and advantage competition, $XXX performance in relationships deal million issues stellar solid the the in impact elevated decision mentioned in estate real were flow which quarterly a million insurance talent. with allowed and growth active have on million more the active market as of these growth steady I’ve selective an top market, impacted Disbursements the at remained year, tax million private provide within moderated specialties generally in categories continued assets. high. standards. sector this originations of XX.X% for new to As loan chain a also executed Despite construction to growth supply active competition, our seasonally million payoffs also in well our markets, XX I’ll the deal somewhat, growth from in a solid quality and equity refis XX.X% finance the decline in with conventional deep continued increase, pipeline the $XX life California business calls reduce $XX was both the insurance or the in growth for some tenure more improved structures also on pushing a the SBA and by elevated by a states all time from of we Rounding out teams unit of will loan the their materially Commercial in portfolio detail. certain as in but flow of also continued housing originator, looking credit net for payoffs total of Despite remaining XX.X% return more existing while is to its our net by has forward. the strong projects annualized. adoption QX maintain pay-downs, take The year. us strong, Life QX in of and SBA types sale premium posted remain more popularity affordable to credit $XX team the recruiting year. trajectories. $XX or or touch ease long The premium

represents on new and Turning markets, St. was beneficiary number quarter. which is book eight the now loan well C&I business the usage, significant as of and the in unit. slide generated largest line the to the the out improved originations portfolios Louis as by break

a real New commitments quarter, estate new estate new also and real occupied construction of industrial in and double book The office lines. fund LANB real under acquisition estate credit transactions, deals quarter A more and purchases as the Class opportunities new of New asset part estate originated. real more City in which estate of Kansas relationship the of new new based growth the and tax commercial markets commercial and included based acquired were expanded Arizona acquisition were long-term and in acquisition runoff be originations, up organic Mexico prior newer were and leases. properties relationships, several will mainly books include these loan than commercial new loan and dealership slower real car fundings owner the large the ramp legacy reflects up and the which some with of model. development the a and C&I for Examples projects, ramped consistent of reduction book multifamily of grew

of these construction smooth we successfully to team, which including In cost savings a Mexico however by Also and loans, Choice. with this extend well and efficient type we this are portfolio have continue the our medium-term base. balances not more In a fix evidence Generally, shorter by The risk increased entrance us growing, important quarter, deal, and a higher than driver LANB is to higher borrowers us in with decline cross-sell commercial offering are the here, diversified of QX. to systems. in book, have with a of strong as the service and There the well California, client also communication something performed and the our leverage more on and emphasize requiring businesses opted transitioned heard sales PPP to large, has flip note structures base, which deepening has -- were balances up real more duration administrative low bridge process, deposit from estate supporting been focused nurture the $XX quarter. frequent net market the First a workflow profile the sales residential construction existing construction through and million and de enables have on training costs. credit business to during residential better our through generally for over opportunities and key relationships was Jim, within attributable base team fourth and credit primarily We into the which over $XX base C&I the as loan support New million further a thorough loans these and offered portion primarily client during to significant of cost and to you’re our categories, by speculative larger loans. to simply is banking conversion smaller net

our Looking County ahead, and is in the talent in recently market. promotion our to experienced will an who commercial long-term commercial LA. expanding focus relocate the company on announced this base employee also the Orange leader of in We lead of teams

also efforts the associate. of SVP, of Additionally, service Enterprise we’re a transplanting management experienced Portfolio with assignment recent Manager products are hires a new and recruiting into Externally, market management C&I the and through treasury treasury producer, sales a officers. C&I client early promising our expertise

Moving now the up and in deposits, checking lending well lower average in California activity the of quarter balances deposit were with annualized. balances continue in with Quarterly geographic well are account new to of in our up now deposits, deposit largest notably, balances with overall the transaction in low Most $XXX of grow cost types. accounts were remains market, on and core are slide closed represent also comprised the X.XX%, non-interest-bearing performed the number within markets, with which Board each generally Account portfolio. all accounts accounts a XX% quarter growth average accounts or nine, positioned average quarter. million the to XX% across nearly up the the across growth of These at highlighted outpacing verticals. XX% primary which cost. also Specialty balances

Now Keene over call I’d like Turner. to Keene? turn to the

Keene Turner

for slide expenses, earnings quarter. per good XX, importantly, earnings Scott, per Most share everyone. share the an $X.XX merger-related were from when we reported start $X.XX share, morning, $X.XX linked adjusted comments basis quarter. the on on Thank, which a was and My per where of excluding improvement third

net record earnings we operating to income, sequential drove had $X.XX addition per a in share In share. also income per increase that

and during throughout DDA. $XXX This higher providing impact balances includes In quarter, approximately increasing to trends. our activities from of million nearly first full results development and quarter to continued income along of costs. fees to by lines from were all offset credit core community seasonally and fee $X.X and the average balances million operations expectations Balances asset also loan slide both increased quarter million, million, revenue with expenses. and and of tax Our due entities markets including interest quality. in million across grow line the reflect of our compared income First specialty expenses net the $X $XXX the quarter, end, with are quarter. on with First in funding full we combined managing the that in strong Choice, earnings partially deposit PPP the with Choice additional $XXX our a deposit flexibility linked On strong XX, had To third was increase growth,

the With a function in higher fundamentals our our customers, highlighted, growth the the that and of as is net stable was yield largest and new modestly. as development from XX margin loan interest of were interest strong well activities. strong driver declined underlying Scott depicts our said, net funds net quarter. margin margin X-basis-point Slide cost As declined as of was deposit in growth resulted interest the the of of balances the overall both trends, which strong cash indicates business liquidity

of in future. dollars interest interest balance to sensitivity floor. floors by in priced X% an rates the are rate. floors that a The our XX% loans additional those in XX-basis-point interest will of rates are income half More principally in an estimate portfolio, to is currently interest result basis. driven advantage higher X% of remains the We of net position Our loan sheet increase increase asset take which annual approximately and on variable those XX% of at loans than have rate

$X than we of XX% position and is prior enhanced loans is Slide cost cost deposit believe quality transaction to liquidity tied through or XX, compared million our we rate million prior our at million overall to which greatly points assets, the annualized, a the Our XX for in to slide of X or of versus to provision losses continued quarter. or and low basis totaled X.XX% portfolio year, the credit were show quarter cycles. of has points level charge-offs ability of an $X current Based portfolio allowance accounts expectation credit resulted on the ability overall basis control less loans. asset the Net position improved total negative and $XXX interest in fourth deposit funding to index. and X.XX% depicts The to losses deposits the million an end for for $X.X loans have end specialty at verticals, the our our non-performing or million unguaranteed $XXX non-interest-bearing of in of quarter. sequentially. which roughly XX formerly represented total continues our improve generate On

core primarily customers. in strong development Choice third First are income. this conversion, system charges fees million continued believe in the has effects improve, holiday the outlook enough of fee of increase $XX trends issues uncertainty $XX grew supply strong we credit masking seasonally $X community case continued stimulus chain million as in economy investments during from government and quarter the result The a third to quarter. effects service our and of we by compared slide we the While XX, led variance, COVID deposit to the coverage. tax income to the there’s On to warrant reported on million, The provide and in fee

income momentum be continues a Also basis, credit the tax our investments seasonal, quarterly continues year. but not development sources to income consistent of space be on this investments to expect generate earn remaining continues. to on additional community on While fees in meaningful do fees our are we

of XX, $X.X fourth to million million, in non-interest the quarter. higher million, expenses The Turning third in compared write-off $X.X as a were million drivers slide $XX -- at was our million of of $XX.X some issuance a quarter the quarter. expenses merger-related expense charges the including $XX include in drivers $XX operating expenses, fourth the operations, First redemption deposit related quarter first a million include costs full of debentures. choice the service of to as subordinated Core remaining full well Choice debt of

XXXX expect be with approximately will expenses normal quarter first million, seasonal then trends $XXX We and in trends the thereafter.

to and not the redeemed also we of in to related material capital addition, by our as capital of issued and demonstrated we the to XX, shareholders. and do costs We repurchasing quantity of the shares were incur further fourth common quality optimize metrics, regulatory capital. busy we shares debentures, of to on of $XX both Notwithstanding, manage the million expect On our took Choice. continue to nearly closing obviously, outstanding In stock returns providing to preferred million action slide stack quarter. we merger fourth subordinated the front any First increase continue to $XX capital million of we $XX quarter, in our

as announced of we have increase totaling for our to also and we to year, the quarters return continue the capital two dividend and XXXX first million increased repurchased quarter another for dividend of each $XX look our the million X.X For shareholders. to shares last we’ve

for earnings, year. and of In the tangible for common we value increased strong addition, book X% XX% share sequentially with have

fourth helped of common Our both drive tangible in quarter. on and XX% the a strategic equity type of amount return management of capital the us

business and merger-related our completed double both on million charges, Adjusted but Our results return non-recurring share the and Jim along talent please, tangible has Choice, busy per of CECL company Seacoast in year events. year. discussed, us now was analyst finished compared excluding to $XXX fourth on well and $X.XX successfully activity positioned of $X.XX, the cap that platform for that for and earnings for XXXX. going the analyst and operator. and We’ve equity common questions. we’ll net the than integration count, for to a Thanks We culture diversified for open quarter today for prior sales the branch generating highlighted we’re important multiple the systems and First with Scott for questions, more while the income year fronts. year full strong take XX%, time, merger At impairment this line call a other joining

Operator

question Davidson. Instructions] you. now [Operator Rulis Jeff ahead. first the We’ll Thank Please D.A. at go take from

Jeff Rulis

morning. Good you. Thank

Jim Lally

Good morning.

Jeff Rulis

pay-downs can to Question you you If speak loan expectations got of specialty down how momentum for indication and basis? about are pay-downs, tough that production. you some into on to against and But the to net you origination predict slow Thanks. if feel in -- the what the are any maybe that XXXX, you saw looking payoffs Do just see any maybe on growth -- here? expectations? begin net like a QX, Scott, meeting the finance, on good production any just you’ve

Jim Lally

Happy Sure. Yeah. to.

of our most expect I certainly think, see in lines. steady. of specialty the growth really to I pipeline continued the first production, all, would remains

see. think is in revolving I increase to good the usage

some ones and in bit I of think companies their I of of be liquidity a into think through chain. maybe the the lines, smaller seeing of we’re running PPP the supply tap may a some little larger moderation some

sign. good a that’s So

well. that I structures, the rates can level that a what market certainly activity moderate we And non-traditional also seen we’ve as real payoffs, would secondary the the certainly velocity estate you with, the said, highly playing see concentrated and area. could within increasing help affect of as potentially commercial field sale most of think, call, bank think, assets that I I

market. investors with well We’re in positioned that

can hold that of and do activity. of structure. acquisition it’s them, and flip, term that originating we’re the a longer can can fix mini loan, seen, California do the shorter more of perm more the in with particularly So kind construction we I is sell where we more but runoffs are investors we mentioned deeper loan, go And the the what construct of some of we’ve term

trend if think, I So, the net positive. effect that will continues, be

Jeff Rulis

a Okay. rebound? Fair or fee the I couple enough. of service kind guess, there fee Is million QX and do just for on then number $X.X that waiver? the what a deposit think you what that then income, the What questions was a quarter? in up And How gave I’ll just line? leave the -- you does now. it

Jim Lally

Jeff, do $XXX,XXX But quarter. a quarter. a is here the in expect to call number. it see it’s the you reason earnest do first negative trend just Yeah. probably It’s that back because $XXX,XXX big not out But we from come XQ. to we XQ that in to

Jeff Rulis

$X And think, annual into then just third Durbin of you is us I get the we a if headwind, as impact? quarter, that about could the remind million

Jim Lally

And of we of XQ. from some think, a little leveraging but overall million with still have, with momentum I believe deal just mean, the sequential to we First starts sort improvements that a I Choice. of XXXX, for for think, have some up the we Yeah. that the year, single-digit in can growth rate the $X a yeah, over overall quarter hit mid I

Jeff Rulis

Okay.

closer in. to million being a So $X

up in seem just income, the I of there. was actual called other the income rate? so miscellaneous, was lastly, you within Okay. run other that sort statement the that income miscellaneous normal within the out down, figure than the but And guys doubled larger servicing that think, the What income

Jim Lally

$X.X and at quarter. in fourth Jeff, in million slide, looking miscellaneous $X.X I’m million the the got XQ I’ve of

in really up swap fairly of big quarter in driver a were equity So little the level. going CDE fees bit the decline and everything’s be exit. modestly, is there private to the had but We fourth

Jeff Rulis

Okay. $X that is occurring… could That that’s what that, the is, million, figure, detail you not it probably

Jim Lally

Yeah.

Jeff Rulis

Go guess. ahead. I and …

Jim Lally

Yeah.

hit but I’ll it. give flavor the my comments, million a say, to and try So, I would more in I you for X bit little this

So, the were CDE year exits there. fairly for the strong

do Moving not million million be potential for a forward, the in going first quarter another XXXX. $X and but $X probably we magnitude, in to the quarter there’s then for fourth expect roughly that it’s

for of annual is the that on likely on that -- not an complete something away certainly that there and basis. item continue. going line it isn’t a quarterly But that’s basis happens to So magnitude and consistently

Jeff Rulis

Okay.

to expectation? conference, growth So, again, just you non-interest up single-digit is income mid entire wrap that total on

Jim Lally

going and And at credit expansion by, to start we strong XX% XX% year, that’s Yeah. see we quarter first that should tax business XXXX have again, the good progress strong the that to principally continues it, some a end of call to and to of here have business. momentum be the and a the with driven

Jeff Rulis

Appreciate it. Thanks.

Jim Lally

Thanks, Jeff.

Operator

We will Liesch next Piper Sandler. now ahead. question the Andrew go at Please take from

Andrew Liesch

Good morning, guys.

Jim Lally

Good morning, Andrew.

Andrew Liesch

Here residential the is in fix mortgages and that or flip some that question California? you So have here? the residential acquired fix are real in estate, maybe is decline flip just and that other the the book, on and construction loans is would

Jim Lally

Choice for. that and lot No. were to flips. those that coming fix are there’s residential Those are properties, -- First more Those of are a of residential coastal investors that properties

Andrew Liesch

it. Got

Okay.

And mean, this how much far do think that product, you I could portfolio decline? further how emphasis on so the with --

Jim Lally

as of what see Yeah. clients still. originate I with are I continue doing relationships as to as the deepening near-term originations mean, I and fix we’re flips. and think, on some well we a those those lot books, But, the I’m the with you pressure I that may think, not on putting see that happy

it’s going moderate. I to short-term, think But some be there think, could pressure. I still

Andrew Liesch

Got how… it. And

Scott Goodman

Andrew. Hey,

perspective put Just there… some

Andrew Liesch

Yeah.

Scott Goodman

pretty some you’re around acquired was $XXX it… much it, million so when halfway perspective, Just through book we that

Andrew Liesch

Okay.

Scott Goodman

…don’t expect.

Andrew Liesch

on new sounds Okay. growth, what’s picked rest lenders you’ve the bringing I respect lead like to then with market. up generating guess, how been from new Very the I California you’re just their? just and someone wonder helpful of the to that customers there. that going is loan in integration tone And the

Jim Lally

Tone is extremely positive.

business owner a in conversation kinds same we’re having markets. client a or of have the with you conversations If a California, in other it’s

So, that is our model I’m resonating very here. confident

we are maybe broader checkbook, we hear willing to that, those clients a pleased explore to bigger very think line continue and really with I things little have to bit have us. product

by we the of strong with the think some our that deals resources pleasantly I reinvest of the I those others kind be U.S. people And external think in have added. a available. talents name about other market the that model that place. gets for I’ve provides as talking with as talents think to thing because a some Bank, well. Union Bank like this of few new interest maybe West-BMO, I opportunity And also the us the been disruption is those here and would on and surprised an I candidates, just we the not talked leveled otherwise playing field in of

to bring I very on talent. continuing So confident feel about new

Andrew Liesch

back. Got it. Thank get you I it. questions. Appreciate for taking the

Operator

next at now take KBW. from Damon Please We go the ahead. question will DelMonte

Damon DelMonte

Hey. everybody today. Good Hope well morning, doing guys. is

Just little on a the a color bullet more to Could the bit looking was regarding approach please? you participations. talk to the strategic bit that, about I more get little

Scott Goodman

I can…

Jim Lally

Yeah.

Scott Goodman

take I that. can

Jim Lally

Go ahead. Okay.

Scott Goodman

Go Go Jim. ahead. ahead, Yeah.

Jim Lally

Okay. me Scott let into I get just, me just detail. mean, say, let

what right? not large Damon. of chunks strategy, right? a what describe That’s not Scott I’ll looking But let It’s what Here’s is. it’s We’re more faceless snake not it’s credit, out not. strategically at it

Scott Goodman

Yeah.

it’s help back real do not minute, have I a managers think, grown, not we’ve deals and other past to strategy efficient the let that’s banks within and up relationship their larger a repeatable source in strategy. we a may as maybe real markets that

go where so we’re that that market RMs, across entered up move that in a doing credit were times and and relationship but do -- that selling area can us develop to the centralize go in desk necessarily a we what which that for of runs an So it side, weren’t or syndication markets as can through that bit, find cases getting grown level, at with centralizing through bank opportunity we with we’ve to markets, that back. desk then a credit a some the also we able those really business is larger new participation companies, little lot buy we into of partners because the an can and legwork specialties

so us. also back that that have we And to sell companies that buy with where with similar also this cultures to credit from those leverages relationship we can

Damon DelMonte

it. Got

book big And envision today Thanks. how helpful. how participation big That’s Okay. getting and is time? that you do over the

Scott Goodman

you can can there. me Keene, you… know. if don’t help tell I I

Keene Turner

Damon, rough…

Scott Goodman

ahead. Go

Keene Turner

a over buy billion. $X and we Rough billion numbers, sell a going $X.X to I’m say that, we

people deals are not what’s bank lending versus And that there, So what’s like sold. that imbalance, community there’s in and big in and coverage bought universe. pretty again, with things deals coverage, a club your in-house they’re out a lot covered terms but of banks are likely where

situated to, So, that some expansion, it. managing looking banks do the to that to some the now more any and trying are referring were peers at equal able to that sell to it’s at what imbalance. small the originating were in local look out Scott’s I recognizing strategy who try be same trying power, street Back and a credits. And make to the to similarly then we’ve got more to we try is when boat just and to that, sure just the we’re when loan-to-deposit, we think loan two-way we XXX% days,

Damon DelMonte

Got it.

we do here Thank loans. quarters? of provision Okay. And coming over for you the mean, I provision strong How about solid credit very obviously, base as probably, That’s great. think about you. forward, going and then, think are trends, Keene, the the we

Keene Turner

Yeah. guaranteed this the points, I about that think, different. we basis slightly unguaranteed before, mean, we XXX versus CECL I obviously, mean, adoption adopted proportions said at I are

probably with So, and we similar -- when when the I being think, everything environment we the adopted comfortable CECL. to perfectly we’re think low of

basis where to out. we that come lot we to And comes XXX that renew net the that’s of the model down. probably, continue growth, will as I think I basis and called a to think balances think, sort points XXX points, credit originate relative the of

see as on have certainly, could more think, provisions definitely we see continues and overall were I could with of is, going just operations. provision, on is that maybe factors absorption is thought segments but substantial some you in a growth growth, be to of comfort some that or improvement muted, from and depending if making depending factors to some we quality which if to the growth that a pandemic the asset composition continue to little the pressure more kind through some what it I downward strong perspective, negative continue also mentioned, with it if continued is is there of be you So, growth economic bit stimulus distressed, of the full of as

Damon DelMonte

it. Got

had. that Thank all much. very you That’s I Okay.

Operator

take… now We’ll you. Thank

Keene Turner

Thanks.

Operator

at from Please Raymond James. next David … the ahead. question go Long

David Long

Thank you. Good everyone. morning,

Jim Lally

Good morning.

David Long

the of the I of plans considered that XXXX? have you that any guidance for fund is do seeing a non-sufficient non-interest something you appreciate peers have they’re fees charging look the is for you consideration -- deposit change on for -- side, to and your fees? for for any lot at with how the on bigger there banks fees, products? guys that those your deposit within As that overdraft XXXX adjustments income, for What Is

Scott Goodman

on by David, some is way $X give we’re going comfort our that just through to also annual million I’ll saying than less that. work that number you an basis.

the in perspective, but in our we’re of there. although, at follow a just from say we’re top basis. closely $X it, certain billion important driving part balances, I -- think and we’ll business going but heels only fees XX annual look don’t still both an us, the overdraft on that, about to muted would of to of on consumer, maintenance is fairly that I So pockets $X.X really take the of and a million fees with regard, it’s

continue we’ll we is amount our of that if discussions for it that but less. evaluate to have with limited the think I to anything So pain and did regulators,

David Long

great. Absolutely

does then, you liquidity rates -- With And there. on aggressive cash color near-term until I sheet. deposit stickiness to of the into the side, a your obviously, by here, really in balances? Appreciate be of higher accelerates? on sort in mean, want the rapidly growing securities moving impacted you And growth it moving expect Okay. that loan how lot that the is in do your balance

Keene Turner

a take or because we environment really asset would and Seacoast of -- the at and coupled think sized around base dictates. portfolio, be XX% in we I to have that on the investments. nothing up rate term overall, continued cash aggressive. First or of good we try think I because didn’t the we where that’s deployment most we that sheet notably, should of say, any terms as size the Yeah. least operating expand and balance and to think target -- dictate the both with We’ve we’ll ended David, environment portfolios a investment with Certainly, I question. them of remixing were let is proportionate short Choice the it’s that, manage do strategies the of

my continue upside. But I that, with a us sensitivity that some and of But you’ll off move want from that want amount think, moving fact I or be -- some couple could securities. I income, that’s it’s the didn’t don’t we think It’s increase perspective, we size expand our interest we increases, point. and we’re to to too we’ve as but get the takes moved the still some certainly, activities that’ll answer. much put next there we’ll good rate cash and securities liquidity unless the get certainly change asset don’t benefit wrung net tightening you we see of development think, potential forward of think it optimism that to build ourselves much of I the taking move would mindful position the the a with the out out to portfolio system where about to a being in over see a do quarters, pressure of little bit that to portfolio, continue that business significant might to and too

we do would I to we to foreseeable have the here I sensitive we’ll through don’t overall investment future flush continue want position asset being and for portfolio for million that $XX in and status a $XX million, good quo certainly, cash investment continue, monitor So levels. But a we, short-term from income. month say, portfolio versus the pick think up will that a interest net moving sit, into just

David Long

Keene. the Cool. Appreciate Yeah. Thanks, Sure. color.

Keene Turner

Welcome. Thanks, David.

Operator

the go from Janney. take Brian [Operator question at Martin Please next Instructions] ahead. We will now

Brian Martin

guys. Good morning, Hey.

Jim Lally

morning. Good

Scott Goodman

morning. Good

Brian Martin

Hey.

Just a touch sensitivity, that? the commentary you know, maybe, you the maybe just on maybe, on the wanted the just your little bit asset don’t on benefits of so like the get just asset of floors a sensitivity, I kind there’s more on loan, and can sounds just the expectations color some of kind a of just give little on Keene, impact bit on before your lag margin but there’s to on

Keene Turner

increase. linear pretty it’s that’s think floor. there’s actually I on with the the I first good Brian, a Yeah. mean, portion

So we’ve of $X.X $X.X billion have rate no interest got loan, floor. variable billion

So see we’ll deposit I there and just to think also the behavior. benefit start

those basis that it then over call zero almost XX XXX are deposit of $X.X increases. points priced point then $X million are that another XX basis at another and with or the so points expect there’s that got just initial $XXX you’ve basis above to billion XX to re-pricing We floor, move. And with less are is they’ll basis floor, billion then points. And a

$X.X you gave cash, I got good got asset the when sheet pretty a increments to level guidance. or points but there’s $XXX and XX what’s is billion of some got million be think it, part even question, points. the basis interest I to just move the again, the basis going zero We basis if moving And between and balance I fairly you of David’s think, is of in based that, that floor probably could So the important it deposit right XX side the we start as another But, that’s down, points, basis chunk with on today. away, accurate up to side. linear way And you’ve now, XX point are on they’re it at we’ve terms as call that you in basis move. XX-basis-point points, forecast much again, increases on on are as and see that would right pretty think, that interpret the the XX somewhere rate are

Brian Martin

you for what And guys earlier was I Keene? points the you. increase said basis -- that guess, the Got XX you annual --

Keene Turner

interest XX basis Yeah. position. The X% cash income to on based dollars points that’s, existing X% margin to points it, of and net basis call XX

Brian Martin

you. Got

that’s position, because just how that sensitivity, how above you over where liquidity the then, the about that that excess liquidity playing outlook? for throughout deploying see do that kind and of or And year, your Okay. excess out does of impact kind asset your mean, expectation I

Keene Turner

When all thought there’s if of One think I I anticipating in I beyond, about What scenarios. think, I that, points go up -- moves But fed single call rates that it, of basis we cash us is mid-to-high additive increase, variety from growth, say that fund that X% start our terms at you don’t guidance you’re it or think XX that that basis that’s the conservatively some in out. ton and points to with think, a static that is, and on that sort it’s we’re, of cash it, the when said, loan point XXX zero given zero would But you think, booking out. I early, yield points, everyone moving basis margin. probably and to that we the and we’ve includes a nice being upside, of XX basis of if with sheet you that, digits. loan picking analysis, you couple loan at, call least at also growth booking balance expects that think

that focus remixing. with out, component or a we I each -- I So moves loan happens the on point some it’s originations shouldn’t make generally side. I’ve at said say when focus, cash cash up we tipping haven’t think point, with there’s the But of and the why that’s a what for that that, reason you But we I linear. deposit think, lot

a sheet sense. makes So it it’s analysis, moves a from a static -- that to dynamic balance if

Brian Martin

does. It No. Yeah.

all kind those that of XXXX’s of of of the the And of fees then the to guess, growth there. potentially fees there CDE kind kind that’s looking bit a level. whatnot, those Durbin help the year-over-year of that in mean, with kind in appreciate with -- off given you’re single-digit of volatile. and I going everything little at, in just I all is CDE type and just Okay. upper the added back on I kind side

Keene Turner

it’s say like would mid I Brian. Yeah. single-digit,

X% overall… I probably X%, think it’s

Brian Martin

Yeah.

Keene Turner

tax the in growth so percent. robust that credit or line XX% item with …

Brian Martin

guys do been stronger, slowing a you I expectations? this kind guess, growth your you And maybe for Okay. that in mean, do I mean, deposit that of has Scott, growth? some this Is I just anticipate -- expecting just I year? deposit guess,

Scott Goodman

liquidity. been excess certainly, we’ve I mean, of beneficiary Yeah. the

accounts I I to business, relates to think new the as expect new it production wouldn’t slowdown.

to we’ve that think, primary interest I the I good developing our be job business, quarter-over-quarter specialties, low type a in businesses. steady particularly as was of growth line done think, local in cost continued and that

Brian Martin

some Okay. maybe, give XXXX? one on Perfect. the just you’re on of kind And thinking these about tax from can just, how I given for the thought you Keene, rate, tax guess, investments, rate me last

Keene Turner

Yeah.

rates think tax going I little move the of bit. a function up to profitability. It’s a

disciplined kept in up to, we as portfolio the much that really credit terms on investment muni. haven’t but we’ve principally the think tax been tried we’ve quite with the on I side despite side, and of the municipal duration

look X% assets higher few of California just as tick some rate so for XXXX. more versus to a you to going X.X%, well. it, a function call up, of of XXXX, perspective XX%, at depending a what on something a it’s with So from XX.X%, state like in And that’s little also profitability that a bit

Brian Martin

Yeah.

the Thanks questions. Okay. taking for Perfect.

Keene Turner

Brian. Thanks, course. Of

Operator

questions-and-answers Mr. this go Mr. like Jim At Please ahead, Lally. today’s sir. Tim, the to turn concludes time, back That sorry, conference session. I’d to

Jim Lally

forward Catherine. And thank in seeing being for for not joining your quarter, you this our -- company sooner. We the you us all Thanks, with if to morning. look first and after interest to

day. great a have So

Operator

your Thank call. you today’s participation. concludes That for

disconnect. may You now

Enterprise Financial Services (EFSC) 25 Jan 222021 Q4 Earnings call transcript