Enterprise Financial Services Corp. (EFSC, Financial) filed Quarterly Report for the period ended 2009-09-30.
Enterprise Financial operates commercial banking and wealth management businesses in metropolitan St. Louis and Kansas City with a primary focus on serving the needs of privately held businesses their owners and other success-minded individuals. Enterprise Financial Services Corp. has a market cap of $110.1 million; its shares were traded at around $8.58 with and P/S ratio of 0.9. The dividend yield of Enterprise Financial Services Corp. stocks is 2.4%.
Three months ended September 30, 2009 and 2008 Net interest income (on a tax-equivalent basis) was $17.9 million for the three months ended September 30, 2009 compared to $16.8 million for the same period of 2008, an increase of $1.1 million, or 6%. Total interest income decreased $0.9 million offset by a decrease in total interest expense of $2.0 million.
Average interest-earning assets increased $205.3 million, or 9%, to $2.387 billion for the quarter ended September 30, 2009 compared to $2.183 billion for the quarter ended September 30, 2008. Loans increased $65.0 million, or 3%, to $2.123 billion. Investment securities increased $65.0 million, or 55%, to $182.7 million. Short-term investments, including cash balances at the Federal Reserve, increased $75.3 million to $80.9 million compared to $5.6 million in the same period of 2008. Interest income on loans increased $1.0 million from growth, but was offset by a decrease of $2.0 million due to the impact of lower rates, for a net decrease of $1.0 million versus the third quarter of 2008.
For the quarter ended September 30, 2009, average interest-bearing liabilities increased $119.8 million, or 6%, to $2.067 billion compared to $1.947 billion for the quarter ended September 30, 2008. The growth in interest-bearing liabilities resulted from a $176.5 million increase in core deposits, a $31.2 million decrease in net brokered certificates of deposit, and a $28.2 million increase in subordinated debentures, offset by a decrease of $53.7 million in borrowed funds including FHLB advances and fed funds purchased. For the third quarter of 2009, interest expense on interest-bearing liabilities increased $1.4 million due to growth; while the impact of declining rates decreased interest expense on interest-bearing liabilities by $3.3 million versus third quarter of 2008, for a net decrease of $1.9 million.
Nine months ended September 30, 2009 and 2008 Net interest income (on a tax-equivalent basis) was $53.2 million for the nine months ended September 30, 2009 compared to $50.2 million for the same period of 2008, an increase of $3.0 million, or 6%. Total interest income decreased $4.3 million and was offset by a decrease in total interest expense of $7.3 million.
Average interest-earning assets increased $271.3 million, or 13%, to $2.348 billion for the nine months ended September 30, 2009 compared to $2.077 billion for the same period of 2008. Loans accounted for the majority of the growth, increasing by $216.9 million, or 11%, to $2.168 billion. Investments in debt and equity securities increased $31.7 million, or 28%, to $144.5 million. Short-term investments increased $22.8 million, from $12.1 million to $34.9 million.
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Enterprise Financial operates commercial banking and wealth management businesses in metropolitan St. Louis and Kansas City with a primary focus on serving the needs of privately held businesses their owners and other success-minded individuals. Enterprise Financial Services Corp. has a market cap of $110.1 million; its shares were traded at around $8.58 with and P/S ratio of 0.9. The dividend yield of Enterprise Financial Services Corp. stocks is 2.4%.
Highlight of Business Operations:
Loan growth At September 30, 2009, portfolio loans were $2.11 billion, a decrease of $88.0 million, or 4%, from December 31, 2008. Portfolio loans decreased by $11.0 million, or 1%, from September 30, 2008 and $23.0 million, or 1%, from June 30, 2009. The decrease from year end is primarily due to clients paying down their lines, weak new loan demand and charge-offs. Enterprise continues to pursue prudent lending opportunities to support local economic activity, with new loan approvals of $272.0 since the issuance of preferred stock to the U.S. Treasury in December 2008. Deposit growth Total deposits were $1.85 billion at September 30, 2009, an increase of $61.0 million, or 3%, from December 31, 2008. Total deposits increased $166.0 million, or 10%, from September 30, 2008 and $94.0 million, and 5%, from June 30, 2009. Brokered deposits declined $128.0 million from December 31, 2008. Excluding brokered certificates of deposit, core deposits grew $302.0 million, or 22%, from a year ago, and $123.0 million, or 8%, during the quarter. Core deposits include certificates of deposit sold to clients through the reciprocal CDARS program. As of September 30, 2009, Enterprise had $133.0 million of reciprocal CDARS deposits outstanding compared to $60.0 million at December 31, 2008. For the third quarter of 2009, brokered certificates of deposit represented 11% of total deposits on average. For the quarter ended December 31, 2008, brokered deposits represented 20% of total deposits on average and 20% for the third quarter of 2008. Non-interest bearing demand deposits represented 14% of total deposits at September 30, 2009, December 31, 2008, and September 30, 2008. In January, we adjusted our incentive programs to focus our associates on deposit gathering efforts. The Companys goal is to drive core deposit growth through relationship selling while at the same time effectively managing the overall cost of funds. Asset quality Loan loss provision for the third quarter of 2009 was $6.5 million compared to $9.1 million in the second quarter of 2009 and $3.0 million in the third quarter of 2008. The lower loan loss provision in the third quarter compared to the second quarter was due to fewer risk rating downgrades and leveling off of nonperforming loans. The Company continues to monitor loan portfolio risk closely and expects nonperforming asset levels to remain elevated. See Provision for Loan Losses and Nonperforming Assets below for more information. Liquidity During the third quarter of 2009, we continued to strengthen our liquidity position by reducing brokered time deposits by $28.0 million and increasing our interest-bearing deposits by $80 million. In addition, we also increased our investment portfolio by $42.0 million. Wealth Management Segment Fee income from the Wealth Management segment, including results from state tax credit brokerage activity, totaled $2.9 million in the third quarter of 2009, a decrease of $312,000, or 10%, from the same quarter of 2008. On a year-to-date basis, fee income from the Wealth Management segment, including results from state tax credit brokerage activity, was $8.5 million, a $983,000, or 10%, decrease from the same period in 2008. See Noninterest Income in this section for more information.Three months ended September 30, 2009 and 2008 Net interest income (on a tax-equivalent basis) was $17.9 million for the three months ended September 30, 2009 compared to $16.8 million for the same period of 2008, an increase of $1.1 million, or 6%. Total interest income decreased $0.9 million offset by a decrease in total interest expense of $2.0 million.
Average interest-earning assets increased $205.3 million, or 9%, to $2.387 billion for the quarter ended September 30, 2009 compared to $2.183 billion for the quarter ended September 30, 2008. Loans increased $65.0 million, or 3%, to $2.123 billion. Investment securities increased $65.0 million, or 55%, to $182.7 million. Short-term investments, including cash balances at the Federal Reserve, increased $75.3 million to $80.9 million compared to $5.6 million in the same period of 2008. Interest income on loans increased $1.0 million from growth, but was offset by a decrease of $2.0 million due to the impact of lower rates, for a net decrease of $1.0 million versus the third quarter of 2008.
For the quarter ended September 30, 2009, average interest-bearing liabilities increased $119.8 million, or 6%, to $2.067 billion compared to $1.947 billion for the quarter ended September 30, 2008. The growth in interest-bearing liabilities resulted from a $176.5 million increase in core deposits, a $31.2 million decrease in net brokered certificates of deposit, and a $28.2 million increase in subordinated debentures, offset by a decrease of $53.7 million in borrowed funds including FHLB advances and fed funds purchased. For the third quarter of 2009, interest expense on interest-bearing liabilities increased $1.4 million due to growth; while the impact of declining rates decreased interest expense on interest-bearing liabilities by $3.3 million versus third quarter of 2008, for a net decrease of $1.9 million.
Nine months ended September 30, 2009 and 2008 Net interest income (on a tax-equivalent basis) was $53.2 million for the nine months ended September 30, 2009 compared to $50.2 million for the same period of 2008, an increase of $3.0 million, or 6%. Total interest income decreased $4.3 million and was offset by a decrease in total interest expense of $7.3 million.
Average interest-earning assets increased $271.3 million, or 13%, to $2.348 billion for the nine months ended September 30, 2009 compared to $2.077 billion for the same period of 2008. Loans accounted for the majority of the growth, increasing by $216.9 million, or 11%, to $2.168 billion. Investments in debt and equity securities increased $31.7 million, or 28%, to $144.5 million. Short-term investments increased $22.8 million, from $12.1 million to $34.9 million.
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