third quarter 2026
Filed Oct 21, 2026Enterprise Financial Services Corp reports third quarter 2026 net income of $42.4 million, with loan and deposit growth, stable net interest margin, and higher credit costs.
Net interest income, loans, deposits, PPNR and adjusted diluted earnings per share increased from the linked quarter, while net income remained below the prior-year quarter and asset-quality pressure increased, including higher nonperforming assets and provision expense.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $42.4M | increase of $1.5 million | decrease of $2.8 million |
| Net income available to common stockholdersGAAP | $41.5M | – | – |
| Diluted earnings per common shareGAAP | $1.14 | – | – |
| Adjusted diluted earnings per common sharenon-GAAP | $1.17 | – | – |
| Net interest incomeGAAP | $174.6M | increase of $5.9 million | increase of $16.3 million |
| Net interest income, tax-equivalent basisother | $177.9M | – | – |
| Net interest margin, tax-equivalentother | 4.30% | stable with the linked quarter | increase of seven basis points |
| Interest incomeGAAP | $238.2M | increase of $8.9 million | increase of $12.8 million |
| Interest expenseGAAP | $63.6M | increase of $3.0 million | decrease of $3.5 million |
| Provision for credit lossesGAAP | $18.1M | – | – |
| Noninterest incomeGAAP | $13.2M | decrease of $0.3 million | decrease of $35.4 million |
| Noninterest expenseGAAP | $114.7M | decrease of $1.1 million | increase of $4.9 million |
| Income before income tax expenseGAAP | $55.1M | – | – |
| Income tax expenseGAAP | $12.6M | – | – |
| Effective tax rateGAAP | 22.9% | – | – |
| PPNRnon-GAAP | $74.6M | increase of $6.4 million | increase of $9.0 million |
| Return on average assetsGAAP | 0.95% | – | – |
| ROATCEnon-GAAP | 10.74% | – | – |
| Core efficiency rationon-GAAP | 58.9% | – | – |
| Total loansGAAP | $12.3B | increase of $452.3 million | increase of $761.6 million |
| Total depositsGAAP | $15.1B | increase of $624.4 million | increase of $1.6 billion |
| Total cost of depositsother | 1.54% | increased one basis point | decreased 26 basis points |
| Allowance for credit losses to total loansGAAP | 1.17% | – | – |
| Nonperforming assets to total assetsGAAP | 1.03% | – | – |
| Net charge-offsGAAP | $11M | – | – |
| Total stockholders' equityGAAP | $1.9B | decrease of $123.5 million | decrease of $65.0 million |
| Tangible common equity to tangible assetsnon-GAAP | 8.13% | – | – |
| Tangible book value per common sharenon-GAAP | $39.45 | – | – |
Capital returns
- Returned $46.5 million to stockholders through the repurchase of 525,767 shares for $34.0 million and $12.5 million through common stock dividends.
- The Company repurchased 525,767 shares at an average price of $64.74 in the third quarter 2026.
- The Board approved a quarterly dividend of $0.36 per common share, payable on December 31, 2026 to stockholders of record as of December 15, 2026.
- The Board declared a cash dividend of $12.50 per share of Series A Preferred Stock, or $0.3125 per depositary share, payable on December 15, 2026.
What drove it
- Organic loan growth and one additional day during the period supported the linked-quarter increase in net interest income.
- Higher average loan and investment balances and lower rates paid on interest-bearing liabilities supported the prior-year increase in net interest income.
- Loan growth was led by construction and land development, life insurance premium financing, and CRE investor owned portfolios, which combined accounted for $310 million in net loan growth during the current quarter.
- Loan volume was $1.3 billion compared to repayment activity of $800.7 million.
- The linked-quarter reduction in noninterest expense reflected lower employee compensation, partly offset by higher loan and legal expenses related to OREO and loan workouts.
- The linked-quarter decline in noninterest income reflected lower tax credit income, partly offset by higher other income.
Concerns
- Nonperforming assets increased $22.4 million from the linked quarter and $47.2 million from the prior-year quarter.
- The ratio of nonperforming assets to total assets rose to 1.03% from 0.92% in the linked quarter and 0.83% in the prior-year quarter.
- The provision for credit losses rose to $18.1 million from $14.2 million in the linked quarter and $8.4 million in the prior-year quarter.
- Third-quarter provision expense was driven mainly by $11.0 million in net charge-offs, increased nonperforming loans and organic loan growth.
- The Company foreclosed on a CRE relationship with a book value of $15.5 million, transferring it to OREO at fair market value less selling costs and recording a partial charge-off of $2.6 million.
- Total equity declined primarily because of higher unrealized losses on the available-for-sale investment securities portfolio due to an increase in interest rates.
- Tangible common equity to tangible assets fell to 8.13% from 9.04% in the linked quarter, while tangible book value per common share declined to $39.45 from $42.30.
What to watch
- Whether loan production continues to outpace repayment activity following $1.3 billion of loan volume in the third quarter.
- Further trends in nonperforming assets, nonperforming loans, net charge-offs and the provision for credit losses.
- The impact of OREO, foreclosure, legal and property-maintenance costs on noninterest expense.
- Whether net interest margin remains at 4.30% as loan yields, deposit costs and borrowing costs evolve.
- The effect of unrealized losses in the investment portfolio on stockholders' equity, tangible common equity and tangible book value per common share.
- Tax credit income, which the Company stated is typically highest in the fourth quarter and varies with transaction volumes and fair value changes.
Balance sheet and cash flow
- Cash and due from banks was $213.3 million at September 30, 2026, compared with $273.9 million at June 30, 2026 and $208.5 million at September 30, 2025.
- Total assets were $17.8 billion at September 30, 2026, compared with $17.4 billion at June 30, 2026 and $16.4 billion at September 30, 2025.
- Debt and equity investments were $3.9 billion at September 30, 2026, compared with $4.0 billion at June 30, 2026 and $3.5 billion at September 30, 2025.
- Investment securities totaled $3.8 billion at September 30, 2026, a decrease of $71.5 million from the linked quarter.
- Total liabilities were $15.9 billion at September 30, 2026, compared with $15.4 billion at June 30, 2026 and $14.4 billion at September 30, 2025.
- Subordinated debentures and notes were $258.4 million at September 30, 2026, compared with $265.9 million at June 30, 2026 and $93.6 million at September 30, 2025.
- FHLB advances were $64.0 million at September 30, 2026, compared with $208.0 million at June 30, 2026 and $327.0 million at September 30, 2025.
- Other borrowings were $179.5 million at September 30, 2026, compared with $208.2 million at June 30, 2026 and $247.0 million at September 30, 2025.
Analysis
EFSC reported third-quarter 2026 net income of $42.4 million, or $1.14 per diluted common share, compared with $40.9 million, or $1.09 per diluted common share, in the linked quarter and $45.2 million, or $1.19 per diluted common share, in the prior-year quarter. Adjusted diluted earnings per share were $1.17, compared with $1.13 in the linked quarter and $1.20 in the prior-year quarter. PPNR increased to $74.6 million from $68.2 million in the linked quarter and $65.6 million in the prior-year quarter, indicating that underlying pre-provision earnings improved despite higher credit costs and lower noninterest income.
Management, verbatim
The strong loan and deposit growth that our team delivered this quarter reflects our associates’ continued commitment to our clients and the strength of our diversified business platform.
Jim Lally, President and Chief Executive Officer
We have continued to grow net interest income which helped offset a higher provision for credit losses for the quarter.
Jim Lally, President and Chief Executive Officer
The strength of our balance sheet and solid return profile provides the foundation to support our growth while continuing to return capital to stockholders.
Jim Lally, President and Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue was not reported as a line item.
- Gross profit and gross margin were not reported.
- Operating income was not reported as a line item.
- Cash flow from operations was not reported.
- Free cash flow was not reported.
- Forward financial guidance was not provided.
- Prior outlook was not provided.
- Reportable operating segment revenue was not provided.
- CFO commentary was not separately provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.