Enterprise Financial Services (EFSC) Q2 2026 earnings summary

Executive summary

• Net income for Q2 2026 was $40.9 million, or $1.09 per diluted share, down from $1.30 in Q1 and $1.36 in Q2 2025.

• Net interest income rose to $168.7 million, up $2.6 million sequentially and $15.9 million year-over-year, with net interest margin at 4.30%.

• Core operating performance was stable, but results were impacted by higher provision expense and charge-offs from two significant commercial credits.

• Loans grew by $199.6 million to $11.9 billion, driven by specialty lending and CRE; deposits were $14.5 billion, down $21.8 million sequentially.

• Asset quality metrics weakened, with net charge-offs of $13.6 million and nonperforming assets rising to 0.92% of total assets.

Financial highlights

• Pre-provision net revenue (PPNR) was $68.2 million, down $2.2 million sequentially.

• Return on average assets (ROAA) was 0.95%, down from 1.16% in the prior quarter and 1.30% a year ago.

• Tangible book value per share was $42.30, up 6% year-over-year.

• Core efficiency ratio was 61.1%; reported efficiency ratio was 63.5%.

• Noninterest income was $13.5 million, down due to investment portfolio restructuring losses and lower tax credit income.

Outlook and guidance

• Management expects charge-offs to normalize to historical levels of 15 basis points in the second half of 2026.

• Loan growth guidance remains mid-single digits, with focus on organic loan and deposit growth and leveraging technology for efficiency.

• Margin expected to remain in the mid to upper 4.20s, with modest pressure from higher funding costs.

• Fee income expected to recover to Q1 levels, with tax credit line breaking even for the year and SBA loan sales resuming.

• Asset quality remains a priority amid economic uncertainty and potential credit market tightening.