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1. Company Snapshot

1.a. Company Description

Enterprise Financial Services Corp operates as the financial holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers.The company offers checking, savings, and money market accounts, and certificates of deposit.It also provides commercial and industrial, commercial real estate, construction and land development, residential real estate, agricultural, and consumer loans.


In addition, the company offers treasury management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and sale of these tax credits to clients; and financial and estate planning, investment management, and trust services to businesses, individuals, institutions, retirement plans, and non-profit organizations.Further, it offers fiduciary, financial advisory, and merchant processing services; and debit and credit cards.Additionally, the company provides international banking, insurance, internet and mobile banking, remote deposit capture, positive pay, fraud detection and prevention, automated payable, check imaging, and statement and document imaging services; and cash management products, controlled disbursements, repurchase agreements, and sweep investment accounts.


It operates banking locations and administrative offices in Arizona, California, Kansas, Missouri, Nevada, and New Mexico market areas, as well as a network of SBA loan production offices and deposit production offices in various states.Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

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1.b. Last Insights on EFSC

Enterprise Financial Services Corp.'s recent performance was negatively impacted by its Q3 earnings miss, with EPS of $1.2 per share, falling short of the Zacks Consensus Estimate of $1.3 per share. Despite solid loan and deposit growth, the company's net interest income expansion was overshadowed by the earnings disappointment. The acquisition of 12 branches from First Interstate Bank added $300 million in loans and $645 million in deposits, but may not have been enough to offset the earnings miss.

1.c. Company Highlights

2. Bank's Q3 Earnings: A Mixed Bag

The bank reported earnings per share of $1.19 in the third quarter, slightly below the adjusted EPS of $1.20 when excluding acquisition costs. Net interest income and margin both showed strong expansion, with net interest income improving by $5.5 million and net interest margin improving by 2 basis points to 4.23%. Revenue growth was driven by a 6% annualized loan growth and significant deposit growth, with deposits increasing by $240 million net of brokered CDs.

Publication Date: Nov -16

📋 Highlights
  • Q3 Earnings Decline:: Earnings per diluted share fell to $1.19 from $1.36 in the prior quarter and $1.32 in Q3 2024.
  • Loan and Deposit Growth:: Loan growth reached $174 million net, while deposits grew by $240 million, maintaining a balanced loan-to-deposit ratio.
  • Net Interest Margin Expansion:: NIM improved by 2 basis points to 4.23%, driven by higher loan and securities balances.
  • Nonperforming Assets Rise:: Increased by $22 million to 83 basis points, primarily due to a $12 million life insurance loan, but expected to normalize soon.
  • Strong Capital Ratios:: Tangible common equity ratio stood at 9.60%, with return on tangible common equity at 11.56% and a 12% annualized tangible book value growth.

Financial Performance

The bank's net interest margin (NIM) of 4.23% was a 2-basis-point improvement from the prior period, indicating a stable NIM despite the Fed reducing interest rates by over 100 basis points in the last year. The bank's ability to continue growing deposits and loans while maintaining a strong NIM is a positive sign. As Keene Turner stated, the bank is largely going to offset the recent rate cut, with the branch acquisition expected to be 5 basis points accretive to the overall net interest margin.

Asset Quality

Nonperforming assets increased by $22 million to 83 basis points of total assets, primarily due to a $12 million life insurance premium loan that is adequately collateralized. The bank continues to be well-reserved with an allowance for credit losses of 1.29% of total loans. Net charge-offs were $4.1 million, compared to $1 million in the linked quarter.

Valuation

The bank's current Price-to-Tangible Book Value (P/TBV) is around 1.0, indicating that the stock is trading at its tangible book value. The Dividend Yield is 2.21%, providing a relatively stable source of return. With analysts estimating revenue growth at 5.8% next year, the stock's valuation multiples appear reasonable. However, the actual EPS of $1.2 was slightly below estimates of $1.3, which may impact investor sentiment.

Outlook

The bank expects to continue delivering strong results for the remainder of the year, driven by its well-positioned balance sheet, strong capital levels, and continued investment in its team and platform. The branch acquisition is expected to contribute to fee income growth, with the company anticipating mid-single-digit growth in fee income. The bank's capital priorities are focused on growth, followed by buybacks, with M&A being considered if a good opportunity arises.

3. NewsRoom

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Boston Partners Has $5.95 Million Stock Position in Enterprise Financial Services Corporation $EFSC

Nov -29

Source: defenseworld.net

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Connor Clark & Lunn Investment Management Ltd. Has $1.90 Million Position in Enterprise Financial Services Corporation $EFSC

Nov -17

Source: defenseworld.net

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Enterprise Financial Services (NASDAQ:EFSC) & Lakeland Financial (NASDAQ:LKFN) Head-To-Head Survey

Nov -15

Source: defenseworld.net

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AlphaQuest LLC Grows Stake in Enterprise Financial Services Corporation $EFSC

Oct -30

Source: defenseworld.net

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Enterprise Financial Services Corp (EFSC) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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Enterprise Financial Services (EFSC) Reports Q3 Earnings: What Key Metrics Have to Say

Oct -27

Source: zacks.com

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Enterprise Financial Services (EFSC) Q3 Earnings Lag Estimates

Oct -27

Source: zacks.com

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Enterprise Financial Services Corp Reports Third Quarter 2025 Results

Oct -27

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Banking and Related Activities

Expected Growth: 4.0%

Strong loan growth driven by increased commercial lending and mortgage demand, coupled with expansion into new markets and strategic partnerships. Additionally, investments in digital transformation and cost savings initiatives have improved operational efficiency, contributing to the 4.0% growth in Banking and Related Activities at Enterprise Financial Services Corp.

7. Detailed Products

Commercial Banking

Provides financial solutions to businesses, including cash management, lending, and trade finance.

Treasury Management

Offers cash management, foreign exchange, and risk management solutions to help businesses optimize their treasury operations.

Investment Banking

Provides advisory services for mergers and acquisitions, equity and debt capital markets, and restructuring.

Markets and Securities

Offers sales, trading, and research services for fixed income, currencies, commodities, and equities.

Wealth Management

Provides investment management, brokerage, and wealth planning services to individuals and families.

Card Services

Offers credit card and payment solutions to consumers and businesses.

Merchant Services

Provides payment processing and merchant services to businesses.

8. Enterprise Financial Services Corp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Enterprise Financial Services Corp is medium due to the presence of alternative financial services providers.

Bargaining Power Of Customers

The bargaining power of customers for Enterprise Financial Services Corp is high due to the availability of alternative financial services providers and the ease of switching.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Enterprise Financial Services Corp is low due to the company's large scale of operations and its ability to negotiate favorable terms with suppliers.

Threat Of New Entrants

The threat of new entrants for Enterprise Financial Services Corp is medium due to the presence of regulatory barriers and the need for significant capital investment to enter the market.

Intensity Of Rivalry

The intensity of rivalry for Enterprise Financial Services Corp is high due to the presence of several established competitors and the need to differentiate itself through innovative products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 8.59%
Debt Cost 8.94%
Equity Weight 91.41%
Equity Cost 8.94%
WACC 8.94%
Leverage 9.40%

11. Quality Control: Enterprise Financial Services Corp passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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EFSC

A-Score: 6.5/10

Value: 6.5

Growth: 7.2

Quality: 6.9

Yield: 4.0

Momentum: 7.0

Volatility: 7.7

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Quality: 7.2

Yield: 7.0

Momentum: 5.0

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Pacific Premier Bancorp

A-Score: 5.9/10

Value: 5.5

Growth: 3.7

Quality: 7.4

Yield: 8.0

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Mid Penn Bancorp

A-Score: 5.8/10

Value: 6.4

Growth: 3.8

Quality: 6.8

Yield: 6.0

Momentum: 4.0

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Sandy Spring Bancorp

A-Score: 4.7/10

Value: 5.3

Growth: 3.3

Quality: 5.2

Yield: 6.0

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HMN Financial

A-Score: 3.9/10

Value: 3.9

Growth: 2.8

Quality: 7.5

Yield: 1.0

Momentum: 5.0

Volatility: 3.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

55.22$

Current Price

55.22$

Potential

-0.00%

Expected Cash-Flows