Enterprise Financial Services Corp (EFSC) 10-Q Quarterly Report October 2018

St. Louis, Mo. October 22, 2018 – Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company” or "EFSC") reported net income of $22.5 million for the quarter ended September 30, 2018, an increase of $0.3 million, and $6.2 million as compared to the linked second quarter and prior year quarter, respectively. Earnings per diluted share were $0.97 for the quarter ended September 30, 2018, an increase of 2% and 41%, compared to $0.95 and $0.69 per diluted share for the linked second quarter and prior year period, respectively.

The increase in net income and earnings per diluted share compared to the linked second quarter was primarily due to stable core earnings and a net tax benefit recognized upon finalization of the Company's 2017 tax returns.

Core Results¹

On a core basis¹, net income totaled $20.0 million, or $0.86 per diluted share, for each of the quarters ended September 30, 2018 and June 30, 2018. Third quarter 2018 diluted core earnings per share¹ grew 30%, or $0.20 per diluted share, from $0.66 for the prior year period which continues to be driven by growth in net interest income mitigated by modest expense growth. The Company's income tax rate for the third quarter of 2018 was 18% compared to 32% in the prior year quarter due to the combination of 2017 federal income tax reform and the Company's tax planning initiatives.

The Company's Board of Directors approved a one cent per common share increase in the Company's quarterly dividend to $0.13 per common share from $0.12 for the fourth quarter of 2018, payable on December 28, 2018 to shareholders of record as of December 14, 2018.

Jim Lally, EFSC’s President and Chief Executive Officer, commented, “Third quarter results reflect another strong earnings per share quarter for our Company. Earnings per share for the third quarter were higher than one year ago by 41% and 30% on a total and core¹ basis, respectively. Our profitability remains very strong with year to date return on average assets of 1.62%, a 51 basis point increase over the prior year period.”

Lally added, “Capital levels continue to build in line with our expectations, affording us the flexibility to increase the dividend and continue modest share repurchase activity. We are encouraged by the strength of our balance sheet as we look to enhance our performance in the fourth quarter and 2019.”

¹A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

The following information was filed by Enterprise Financial Services Corp (EFSC) on Monday, October 22, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Enterprise Financial Services Corp's 10-Q Quarterly Report:

Other - Other Highlight
These alternatives are an important part of our liquidity plan and provide flexibility and efficient execution of the asset-liability management strategy.

Financial - Debt Highlight
The Company has an effective shelf registration statement on Form S-3 registering up to $100 million of common stock, preferred stock, debt securities, and various other securities, including combinations of such securities.
Financial - Income Highlight
Noninterest income for the first nine months of 2018 increased $4.4 million or 19%, compared to the prior year period primarily due to $2.0 million of nonrecurring revenue along with higher income from deposit service charges and card services from growth in the client base.
Other - Other Highlight
Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements.
Financial - Expense Highlight
However, pressure on funding costs could hinder the expected trends in core net interest margin.
Other - Other
Below are highlights of the...Read more
Financial - Income
The Company estimates income from...Read more
Other - Other
The improvement over the prior...Read more
Financial - Earnings
Core net interest margin expanded...Read more
Financial - Earnings
The diluted core earnings per...Read more
Financial - Earnings
On a core basis, net...Read more
Financial - Earnings
Significant activity during the nine...Read more
Financial - Expense
Core expenses increased over the...Read more
Financial - Earnings
Net interest margin for the...Read more
Financial - Income
The Company continues to manage...Read more
Financial - Expense
Core noninterest expense was $87.6...Read more
Financial - Earnings
The decrease in net interest...Read more
Financial - Expense
Core noninterest expenses increased $7.8...Read more
Financial - Expense
The current year period includes...Read more
Revenue - Product
Core performance measures also exclude...Read more
Other - Other
The Company's management uses, and...Read more
Other - Other
The increase in liabilities was...Read more
Financial - Cash Flow
Accelerated cash flows and other...Read more
Financial - Cash Flow
Accelerated cash flows and other...Read more
Revenue - Product
During the nine months ended...Read more
Other - Other
In the following tables, the...Read more
Financial - Earnings
Core Performance Measures Net Interest...Read more
Other - Other
Nonperforming assets The following table...Read more
M & A - Other
The run-off of higher yielding...Read more
Revenue - Product
Total securities available for sale...Read more
Revenue - Product
The Company expects to continue...Read more
Financial - Income
Core noninterest income grew 12%...Read more
Financial - Shares
Quantitative measures established by regulation...Read more
Financial - Shares
Shareholders' Equity Shareholders' equity totaled...Read more
Financial - Income
The Company expects growth in...Read more
Financial - Expense
Noninterest Expense The following table...Read more
Financial - Income
Noninterest income increased $4.4 million,...Read more
Other - Other
Funds are available from a...Read more
Financial - Income
The Company's effective tax rate...Read more
M & A - Other
The Company considers its core...Read more
Other - Other
Nonperforming loans based on loan...Read more
Legal - Other
Forward-looking statements speak only as...Read more
Other - Other
The remaining $317.9 million could...Read more
Financial - Shares
The Company believes that the...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Enterprise Financial Services Corp provided additional information to their SEC Filing as exhibits

Exhibit 12.1: Computation Of Ratio Of Earnings To Fixed Charges And Preferred Dividends

Exhibit 31.1: Chief Executive Officer Certification Required By Rule 13(A)-14(A)

Exhibit 31.2: Chief Financial Officer Certification Required By Rule 13(A)-14(A)

Exhibit 32.1: Chief Executive Officer Certification Pursuant To 18 U.S.C Sect 1350

Exhibit 32.2: Chief Financial Officer Certification Pursuant To 18 U.S.C Sect 1350

Ticker: EFSC
CIK: 1025835
Form Type: 10-Q Quarterly Report
Accession Number: 0001025835-18-000098
Submitted to the SEC: Fri Oct 26 2018 12:30:08 PM EST
Accepted by the SEC: Fri Oct 26 2018
Period: Sunday, September 30, 2018
Industry: State Commercial Banks