Enterprise Financial(US:EFSC)2025-10-27 20:06Financial Performance - Net income for Q3 2025 was $45.2 million, a decrease of $6.1 million from the linked quarter and $5.4 million from the prior year quarter, with diluted earnings per share at $1.19[2] - Net income available to common stockholders for Q3 2025 was $44,297,000, down 11.4% from $50,447,000 in Q2 2025[46] - Net income (GAAP) for the quarter ended September 30, 2025, was $45,235,000, compared to $51,384,000 in the previous quarter, reflecting a decrease of 10.5%[57] - Basic earnings per common share for Q3 2025 were $1.20, a decrease from $1.36 in Q2 2025[46] - Return on average assets for Q3 2025 was 1.11%, a decline from 1.30% in Q2 2025 and 1.30% in Q1 2025[43] - Return on average common equity (non-GAAP) decreased to 9.29% from 11.03% in the previous quarter, a decline of 15.7%[57] Revenue and Income Sources - Net interest income increased to $158.3 million, up $5.5 million from the linked quarter, and net interest margin (NIM) was 4.23%, a quarterly increase of 2 basis points[3] - Noninterest income included $30.1 million from anticipated insurance proceeds related to a tax credit recapture event, with total noninterest income at $46.6 million[4] - Noninterest income for Q3 2025 was $46.6 million, a significant increase of $26.0 million from the linked quarter, primarily due to $30.1 million in accrued insurance proceeds[21] - Noninterest income (GAAP) rose significantly to $46,649,000, compared to $20,604,000 in the previous quarter, indicating an increase of 126.5%[58] Loans and Deposits - Total loans reached $11.6 billion, reflecting a quarterly increase of $174.3 million, while total deposits rose to $13.6 billion, an increase of $250.6 million[4] - Total loans reached $11,583,109,000 as of September 30, 2025, up from $11,079,892,000 a year earlier, representing an increase of about 4.5%[52] - Loan production for the quarter was $863.3 million, exceeding repayment activity of $689.0 million[16] - Total deposits increased to $13,567,912,000 in Q3 2025, compared to $13,317,359,000 in Q2 2025, reflecting a growth of 1.9%[48] Expenses and Costs - Noninterest expense rose to $109.8 million, an increase of $4.1 million from the linked quarter, primarily due to higher variable deposit costs and loan-related expenses[4] - Total noninterest expense for Q3 2025 was $109,790,000, an increase from $105,702,000 in Q2 2025[46] - Noninterest expense (GAAP) rose to $109,790,000 in Q3 2025 from $105,702,000 in Q2 2025, highlighting increased operational costs[56] Credit Quality and Losses - The provision for credit losses was $8.4 million, compared to $3.5 million in the linked quarter, with the allowance for credit losses to total loans at 1.29%[4] - Nonperforming loans increased to $127.9 million, up from $105.8 million in the previous quarter, resulting in a nonperforming loans to total loans ratio of 1.10%[17] - Net charge-offs increased to $4,057,000 in Q3 2025 from $630,000 in Q2 2025, reflecting a significant rise in credit losses[54] - The allowance for credit losses stood at $148,854,000 as of September 30, 2025, up from $145,133,000 at the end of Q2 2025[48] Capital and Equity - The tangible common equity to tangible assets ratio was 9.60%, an increase of 18 basis points from the linked quarter[6] - Total equity increased to $2.0 billion at September 30, 2025, up $59.4 million (3%) from the linked quarter and $150.3 million (8%) from the prior year quarter[29] - Tangible book value per common share rose to $41.58, compared to $40.02 in the linked quarter and $37.26 in the prior year quarter[29] - The Tier 1 capital to risk-weighted assets ratio was 13.3% for Q3 2025, slightly up from 13.2% in the linked quarter[28] Tax and Regulatory - The effective tax rate for Q3 2025 was 47.8%, significantly higher than 20.0% in the linked quarter, primarily due to $24.1 million in transferrable tax credits recaptured[27] - The adjusted effective tax rate (non-GAAP) remained stable at 20.0% in both Q3 2025 and Q2 2025[59] Other Notable Items - The Company completed the acquisition of 10 branches in Arizona and two in Kansas, enhancing its market presence[1] - The quarterly dividend was increased to $0.32 per share, payable on December 31, 2025[5] - The Company realized a net gain of $1.1 million on the sale of $22.2 million of guaranteed SBA loans in the current quarter, contrasting with a net gain of $3.2 million on the sale of OREO in the prior year quarter[24]