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Enterprise Financial(EFSC) - 2024 Q4 - Annual Report
EFSCEnterprise Financial(EFSC)2025-02-28 22:14
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Financial Performance and Strategy - The company was awarded 60.0millionand60.0 million and 50.0 million in New Markets Tax Credit allocations for 2023 and 2024, respectively, bringing the total allocations to 353.0million[27].−Thecompanyfocusesonspecializedlendingniches,includingSBA7(a)loans,lifeinsurancepremiumfinance,andtaxcreditrelatedlending,whichenhancesitscompetitiveadvantage[26].−Theefficiencyratio,whichmeasuresnoninterestexpensedividedbytotalrevenue,isakeymetricforthecompany′sexpensemanagementstrategy[31].−Thecompanyemphasizesarelationship−drivengrowthstrategy,targetingprivately−heldbusinessesandtheirownerfamilies[23].−Thecompanymaintainsadisciplinedapproachtoacquisitions,whichhassignificantlycontributedtoitsgrowthandexpansion[31].−Thecompanyoffersabroadrangeoftreasurymanagementproductsandservices,generatingsignificantfeeincome[28].−Thecompanyoperatesinhighlycompetitivemarkets,facingcompetitionfromvariousfinancialinstitutionsandfintechcompanies[32].RegulatoryComplianceandCapitalRequirements−Thecompanyhasmorethan353.0 million[27]. - The company focuses on specialized lending niches, including SBA 7(a) loans, life insurance premium finance, and tax credit related lending, which enhances its competitive advantage[26]. - The efficiency ratio, which measures noninterest expense divided by total revenue, is a key metric for the company's expense management strategy[31]. - The company emphasizes a relationship-driven growth strategy, targeting privately-held businesses and their owner families[23]. - The company maintains a disciplined approach to acquisitions, which has significantly contributed to its growth and expansion[31]. - The company offers a broad range of treasury management products and services, generating significant fee income[28]. - The company operates in highly competitive markets, facing competition from various financial institutions and fintech companies[32]. Regulatory Compliance and Capital Requirements - The company has more than 10 billion in assets, making it subject to examination by the Consumer Financial Protection Bureau (CFPB)[34]. - The company is subject to regulation and supervision by the Federal Reserve and the FDIC, ensuring compliance with banking regulations[33]. - The Company is required to maintain a Common Equity Tier 1 (CET1) capital ratio of 7.0% to avoid restrictions on capital distributions[59]. - All of the Bank's capital ratios were at levels that qualify it to be "well-capitalized" for regulatory purposes as of December 31, 2024[62]. - The Company must continue to be considered well-managed and well-capitalized by the Federal Reserve to remain a financial holding company[40]. - The Federal Reserve requires prior approval for the Company to acquire substantially all the assets of any bank or to merge with another bank holding company[41]. - The Company is subject to capital requirements established by the Federal Reserve, which are applied on a consolidated basis[45]. - The Dodd-Frank Act requires bank holding companies to serve as a source of strength for their subsidiary depository institutions[44]. - The Bank is subject to extensive federal and state regulatory oversight, including capital adequacy standards set by the FDIC[54]. - The Bank's payment of dividends is subject to statutory and regulatory limitations, including the requirement to maintain capital above regulatory guidelines[71]. Consumer Protection and Compliance - The CFPB has broad rule-making authority that may significantly impact consumer mortgage lending and servicing, particularly with new regulations on mortgage origination standards[66]. - The Bank is subject to various consumer protection laws, including the Truth in Lending Act and the Fair Credit Reporting Act, which mandate disclosure requirements and regulate customer interactions[67]. - The USA PATRIOT Act requires the establishment of an anti-money laundering program and due diligence policies for financial institutions[79]. - The proposed rule by FinCEN in June 2024 aims to amend AML/CFT program requirements, including risk assessment processes for financial institutions[78]. - The FDIC's proposed rulemaking in September 2023 aims to establish standards for corporate governance and risk management for banks with total consolidated assets of 10billionormore[84].EmployeeandWorkplacePolicies−AsofDecember31,2024,thecompanyemployed1,218regularfull−timeand38part−timeassociates[87].−Approximately6710 billion or more[84]. Employee and Workplace Policies - As of December 31, 2024, the company employed 1,218 regular full-time and 38 part-time associates[87]. - Approximately 67% of associates are eligible for the Short Term Incentive Plan (STIP), which aligns compensation with performance[90]. - The company's minimum wage is set at 17 per hour, ensuring all associates earn above this threshold[91]. - The company has been recognized as one of the "Best Banks to Work for" for seven consecutive years, ranking fourth among similar financial institutions in 2024[93]. - The company offers a comprehensive benefits package, including 401(k), paid time off, and wellness programs[92]. - The Career Acceleration Program provides training in credit and commercial banking, with successful participants placed in roles that match their strengths[98]. - The company emphasizes a safe and healthy workplace, adhering to local, state, and federal safety regulations[96]. - The Belonging & Inclusion Council aims to foster an inclusive environment and improve diversity within the workforce[95]. - The company conducts annual talent reviews to identify high-performing associates and future leaders[88]. - The company regularly compares compensation and benefits with peer companies to maintain competitiveness[89].