Enterprise Financial Services Corp (EFSC) Q3 2023 Earnings: Net Income of $44.7 Million
EFSC's net income for Q3 2023 stands at $44.7 million, marking a decrease from the linked quarter and the prior year quarter.
Net interest income increased by $0.9 million from the previous quarter, reaching $141.6 million.
Total deposits saw a quarterly increase of $290.0 million, amounting to $11.9 billion.
The company's tangible common equity to tangible assets ratio was 8.51%.
Enterprise Financial Services Corp (NASDAQ:EFSC) released its third-quarter earnings report on October 23, 2023. The company reported a net income of $44.7 million, or $1.17 per diluted common share. This represents a decrease from the linked quarter and the prior year quarter. Despite the challenging environment, EFSC managed to expand its net interest income while strengthening liquidity and increasing its customer base.
Financial Performance
EFSC's net interest income for Q3 2023 was $141.6 million, marking a quarterly increase of $0.9 million and a year-over-year increase of $17.3 million. The net interest margin was 4.33%, a decrease of 16 basis points from the linked quarter. Total loans amounted to $10.6 billion, a quarterly increase of $104.2 million. Total deposits also saw a quarterly increase of $290.0 million, reaching $11.9 billion. The company's tangible common equity to tangible assets ratio stood at 8.51%.
Company Commentary
Jim Lally, President and Chief Executive Officer of EFSC, commented on the company's performance. He stated,
We had strong third quarter operating results with earnings per share of $1.17, a net interest margin of 4.33%, and a return on average assets of 1.26%. In a challenging environment, we continued to expand net interest income while strengthening liquidity and increasing our customer base. In line with our expectations, loan growth moderated this quarter, and we successfully increased customer deposits and reduced wholesale funding. The strength of our balance sheet and operating revenue has us well-positioned to continue delivering long-term shareholder value."
Financial Tables
The company's average balance sheets showed an increase in interest-earning assets, with loans amounting to $10,521,966, securities to $2,302,850, and interest-earning deposits to $335,771. The total net interest income was $143,700, with a net interest margin of 4.33%. The total assets amounted to $14,068,860.
The total shareholders' equity was $1.6 billion, and the tangible common equity to tangible assets ratio was 8.51% at September 30, 2023. The company's Board of Directors approved a quarterly dividend of $0.25 per common share, payable on December 29, 2023, to shareholders of record as of December 15, 2023.
Analysis
Despite the decrease in net income, EFSC demonstrated resilience by expanding its net interest income and strengthening liquidity. The company's strategy of increasing customer deposits and reducing wholesale funding has contributed to the strength of its balance sheet. The moderate growth in loans aligns with the company's expectations, indicating a strategic approach to managing its resources. The approved dividend also reflects the company's commitment to delivering shareholder value.
This article first appeared on GuruFocus.
