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| 8-K - 8-K - ENTERPRISE FINANCIAL SERVICES CORP | a2017-058kannualshareholde.htm |
Enterprise Financial Services Corp
ANNUAL SHAREHOLDER MEETING – MAY 2, 2017
2
JOHN S. EULICH
CHAIRMAN, EFSC
2017 ANNUAL SHAREHOLDER MEETING
3
JAMES J. MURPHY, JR.
THANK YOU FOR YOUR SERVICE AND
MANY CONTRIBUTIONS
2002-2017
4
WILLIAM H. DOWNEY
THANK YOU FOR YOUR SERVICE AND
MANY CONTRIBUTIONS
2002-2017
5
ELOISE E. SCHMITZ
WELCOME NEW EFSC DIRECTORS
NEVADA A. KENT IV
MICHAEL W. WALSH JAMES B. LALLY
6
LEGAL MEETING
2017 ANNUAL SHAREHOLDER MEETING
7
PETER F. BENOIST
THANK YOU FOR YOUR
YEARS OF DEDICATION TO EFSC
2002-2017
8
HIGH PERFORMANCE LEADERSHIP
9
KEENE S. TURNER
CHIEF FINANCIAL OFFICER, EFSC
2017 ANNUAL SHAREHOLDER MEETING
10
2016 HIGHLIGHTS
Record Earnings Per Share $2.41 $2.03
Growth of Earnings Per Share 28% 22%
Return on Assets 1.29% 1.09%
Efficiency Ratio 52% 55%
EFSC Stock Price $43.00
EFSC Dividend/Share $0.41
Core*
Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
11
FULL YEAR EARNINGS PER SHARE TREND
$1.66
$0.51 < $0.02>
$0.04 <$0.16>
$2.03
2015 YTD Net Interest
Income
Portfolio Loan
Loss Provision
Non Interest
Income
Non Interest
Expense
2016 YTD
CHANGES IN CORE EPS*
Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
12
POSITIVE MOMENTUM IN CORE*
EARNINGS PER SHARE
$0.28
$0.31
$0.37
$0.33
$0.35
$0.38
$0.44
$0.49
$0.47
$0.49 $0.49
$0.59 $0.59
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation
111% Core EPS Growth from Q1 2014 to Q1 2017
13
CORE NET INTEREST INCOME TREND*
In Millions
Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation
$29.6 $30.2
$31.5 $32.2
$37.6
3.54% 3.52% 3.54% 3.44% 3.63%
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
$11.0
$12.0
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
$19.0
$20.0
$21.0
$22.0
$23.0
$24.0
$25.0
$26.0
$27.0
$28.0
$29.0
$30.0
$31.0
$32.0
$33.0
$34.0
$35.0
$36.0
$37.0
$38.0
$39.0
$40.0
$41.0
$42.0
$43.0
$44.0
$45.0
$46.0
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Core Net Interest Income* FTE Core Net Interest Margin*
14
CREDIT TRENDS FOR PORTFOLIO LOANS
-1 bps
-6 bps
14 bps
12 bps
-1 bps
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Net Charge-offs (1)
Q1 2017 EFSC PEER(2)
NPA’S/ASSETS = 0.33% 0.66%
NPL’S/LOANS = 0.36% 0.77%
ALLL/NPL’S = 283% 112%
ALLL/LOANS (4) = 1.02% 1.04%
(1) Portfolio loans only, excludes non-core acquired loans
(2) Peer data as of 12/31/2016 (source: SNL Financial)
(3) Excludes JCB
(4)1.65% including JCB Credit Mark
In Millions
$82
$51
$154
$80
$56
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Portfolio Loan Growth (3)
In Millions
Net Charge-offs (1)
2016 NCO = 5 bps
$0.8 $0.7
$3.0
$1.0
$1.5
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Provision for Portfolio Loans
15
OPERATING EXPENSES TREND*
In Millions
Note: * A Non-GAAP Measure, Refer to Appendix for Reconciliation
$6.1 $6.5 $6.4 $7.0 $7.0
$1.7 $1.6 $1.7
$1.7 $1.9
$12.6 $12.3 $12.1
$12.4
$16.0
57.4% 56.3%
52.8% 52.7%
56.0%
-2
3
8
13
18
23
28
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
Other Occupancy Employee compensation and benefits Core Efficiency Ratio*
$20.4
$21.1 $20.2 $20.4
$24.9
16
2016 HIGHLIGHTS
Record Earnings Per Share $2.41 $2.03
Growth of Earnings Per Share 28% 22%
Return on Assets 1.29% 1.09%
Efficiency Ratio 52% 55%
EFSC Stock Price $43.00
EFSC Dividend/Share $0.41
Core*
Note: * A Non GAAP Measure, Refer to Appendix for Reconciliation
17
SCOTT R. GOODMAN
PRESIDENT, ENTERPRISE BANK & TRUST
2017 ANNUAL SHAREHOLDER MEETING
18 SOURCE: SNL FINANCIAL
EFSC (16 BRANCHES TOTAL, 6 BRANCHES IN ST. LOUIS MSA)
JCB (18 BRANCHES TOTAL, 17 BRANCHES IN ST. LOUIS MSA)
ST. LOUIS MSA
STRATEGIC, IN-MARKET ACQUISITION OF
JEFFERSON COUNTY BANCSHARES, INC. (“JCB”)
JCB ASSETS ELEVATE US TO A $5 BILLION
FINANCIAL INSTITUTION
OUR FOOTPRINT IN THE ST. LOUIS MARKET
ENHANCED WITH 18 ADDITIONAL BRANCHES
TOP FOUR DEPOSIT MARKET SHARE IN
THE ST. LOUIS MSA
INTRODUCTION OF 37,000 NEW JCB
CUSTOMERS
MO
19
(1) COMMUNITY BANKS DEFINED AS INSTITUTIONS HAVING LESS THAN $10 BILLION IN DEPOSITS
SOURCE: SNL FINANCIAL, FDIC; DEPOSIT DATA AS OF JUNE 30, 2016
TOP 4 DEPOSIT MARKET SHARE
EFSC IS THE SECOND LARGEST COMMUNITY BANK BY
DEPOSITS IN MISSOURI (1)
STRENGTHENS EFSC’S ALREADY SIGNIFICANT ST.
LOUIS FOOTPRINT
Rank Institution
# of
Branches
June '16
Total
Deposits
Market
Share
(%)
1 U.S. Bancorp (MN) 117 13,440,724 19.26
2 Bank of America Corp, (NC) 52 11,264,321 16.15
3 Commerce Bancshares Inc. (MO) 48 6,450,739 9.25
4 Enterprise Financial Services Corp (MO) 23 2,980,987 4.27 %
5 Regions Financial Corp. (AL) 62 2,761,735 3.96
6 PNC Financial Services Group (PA) 43 2,231,254 3.2
7 First Banks Inc. (MO) 48 2,187,788 3.14
8 Banc Ed Corp. (IL) 20 1,533,999 2.2
9 Stupp Bros. Inc. (MO) 22 1,449,099 2.08
10 Central Bancompany Inc. (MO) 15 1,310,776 1.88
Top 10 Institutions 450 45,611,422 65.39
Total for Institutions in Market 892 69,769,443 100.00 %
20
JCB’S EXPANDED COMMERCIAL AND RETAIL CUSTOMER BASES ARE
COMPLEMENTARY TO EFSC’S EXISTING PRODUCT SETS
OPPORTUNITY TO DEEPEN CLIENT RELATIONSHIPS ACROSS THE EFSC
PRODUCT SET
FEE INCOME OPPORTUNITIES (1)
(1) REPRESENT ILLUSTRATIVE AREAS OF POTENTIAL FEE INCOME ENHANCEMENT; POTENTIAL REVENUE ENHANCEMENTS NOT INCLUDED IN ESTIMATES OF FINANCIAL IMPACT PROVIDED HEREIN
WEALTH MANAGEMENT
CARD SERVICES
TREASURY MANAGEMENT
MORTGAGE
21
PORTFOLIO LOAN TRENDS
$2,833
$2,884
$3,038
$3,118
$3,853
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
In Millions
*Note: 12% excluding acquisition of JCB
JCB $678
22
$1,545 $1,541
$1,599
$1,633
$1,774
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
COMMERCIAL & INDUSTRIAL LOAN TRENDS
In Millions
JCB $79
*Note: 10% excluding acquisition of JCB
23
DEPOSIT TRENDS
$2,932
$3,028
$3,125
$3,233
$4,032
24.5% 24.9% 24.4% 26.8% 25.7%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17
800
1,300
1,800
2,300
2,800
3,300
3,800
4,300
Deposits DDA %
Last Twelve Months Growth Rate = 38%, 11% Excluding Acquisition of JCB
In Millions
JCB $774
24
ST. LOUIS
PORTFOLIO LOANS & DEPOSITS
In Millions
$1,468
$1,737
$2,448
Q1 '16 Q4 '16 Q1 '17
Deposits JCB Deposits
$1,427 $1,556
$2,210
Q1 '16 Q4 '16 Q1 '17
Loans JCB Loans
JCB
$678
JCB
$774
25
KANSAS CITY
PORTFOLIO LOANS & DEPOSITS
$532
$591 $614
Q1 '16 Q4 '16 Q1 '17
Loans
In Millions
$650 $659
$773
Q1 '16 Q4 '16 Q1 '17
Deposits
26
ARIZONA
PORTFOLIO LOANS & DEPOSITS
$188
$226 $236
Q1 '16 Q4 '16 Q1 '17
Loans
In Millions
$100 $107 $113
Q1 '16 Q4 '16 Q1 '17
Deposit
27
SPECIALIZED LENDING
PORTFOLIO LOANS
In Millions
$686
$745 $793
Q1 '16 Q4 '16 Q1 '17
Loans
ENTERPRISE VALUE LENDING
LIFE INSURANCE PREMIUM FINANCING
TAX CREDIT PROGRAMS
AIRCRAFT FINANCE
MEMBER FDIC 28
NET PROMOTER SCORE
Industry-leading customer service and satisfaction
2015 2016 Banking Average
KC 46 65
35
St. Louis 58 61
Average 52 63
Enterprise won a total of three 2016
Greenwich Excellence Awards in the
Middle Market segment.
Source: Greenwich Associates
29
OPPORTUNITIES EXIST
CLIENT SATISFACTION DRIVERS
Client satisfaction
scores are industry
leading. We’re focused
on leveraging ways to
improve industry
understanding and
providing ideas to
clients.
1. Ease of doing business
2. Relationship
3. Understanding of your industry
4. Provides ideas and advice
KEY DRIVERS OF CLIENT SATISFACTION SCORE PEER
AVG.
95%
91%
78%
78%
83%
78%
64%
69%
Source: Greenwich Associates
30
JAMES B. LALLY
PRESIDENT & CEO, EFSC
2017 ANNUAL SHAREHOLDER MEETING
31
EFSC MARKET CAPITALIZATION
Total Shareholder Return
EFSC 146%
SNL US Bank Index 46% > 100%
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
EFSC Market Capitalization
March 31, 2014 - April 26, 2017
Market Cap
at 3/31/14:
$395mm
Market Cap
at 4/26/17:
$1,034 mm
161.4%
32
I
M
P
R
O
V
E
.
.
.
Diversified,
double-
digit
revenue
growth
Low cost,
resilient
funding
Superior
return on
investment
(ROI)
Align and
manage
support
functions
to drive
profitability
Service Levels
Urban Markets
Operating
Leverage
Scalability
Cost/Unit
Shareholder
Returns
PROCESS EVOLUTION
33
INNOVATION INTO ACTION
Executive
Team
Innovation
Team
• Financial Plan/Return
• Resource Needs
• Risk Analysis (Legal,
compliance, vendor)
P
rioritiz
ation
• Review Project Status
• Oversee periodic look-
back, post implementation
Animation
Team
Implementation
&
Accountability
Rec
om
m
en
d
“Go
/No G
o”
• Idea Creation/Formation
Idea Charter Prioritize Analyze
Go /
No Go
Implement
34
MARKETING & SALES FUNNEL
Awareness
Interest
Consideration
Intent
Evaluation
Purchase
NOW… …FUTURE
Marketing
Sales
Marketing
Sales
35
2017 ANNUAL SHAREHOLDER MEETING