Regional banking company Enterprise Financial Services (NASDAQ: EFSC) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 11.1% year on year to $173.4 million. Its non-GAAP profit of $1.37 per share was 13.5% above analysts’ consensus estimates.
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Enterprise Financial Services (EFSC) Q2 CY2025 Highlights:
- Net Interest Income: $152.8 million vs analyst estimates of $148.3 million (8.7% year-on-year growth, 3% beat)
- Net Interest Margin: 4.2% vs analyst estimates of 4.1% (flat year on year, 11 bps beat)
- Revenue: $173.4 million vs analyst estimates of $164 million (11.1% year-on-year growth, 5.7% beat)
- Efficiency Ratio: 61% vs analyst estimates of 60.3% (0.7 percentage point miss)
- Adjusted EPS: $1.37 vs analyst estimates of $1.21 (13.5% beat)
- Market Capitalization: $2.07 billion
Company Overview
Starting as a single bank in Missouri in 1988 and expanding through strategic growth, Enterprise Financial Services (NASDAQ: EFSC) is a financial holding company that offers banking, lending, and wealth management services to businesses and individuals across seven states.
Sales Growth
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities.
Over the last five years, Enterprise Financial Services grew its revenue at an incredible 17.1% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Enterprise Financial Services’s annualized revenue growth of 5.7% over the last two years is below its five-year trend, but we still think the results were respectable. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Enterprise Financial Services reported year-on-year revenue growth of 11.1%, and its $173.4 million of revenue exceeded Wall Street’s estimates by 5.7%.
Net interest income made up 87.4% of the company’s total revenue during the last five years, meaning Enterprise Financial Services barely relies on non-interest income to drive its overall growth.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
Enterprise Financial Services’s TBVPS grew at an incredible 10.6% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 13.2% annually over the last two years from $31.22 to $40.02 per share.
Over the next 12 months, Consensus estimates call for Enterprise Financial Services’s TBVPS to grow by 8.2% to $43.32, decent growth rate.
Key Takeaways from Enterprise Financial Services’s Q2 Results
We were impressed by how significantly Enterprise Financial Services blew past analysts’ revenue expectations this quarter. We were also glad its net interest income outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $56.38 immediately after reporting.
Sure, Enterprise Financial Services had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
