EX-99.1 2 ex991financialstatementsan.htm EARNINGS RELEASE
EXHIBIT 99.1
Filed by Enterprise Financial Services Corp
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6(b)
of the Securities Exchange Act of 1934
Subject Company: Trinity Capital Corporation
Commission File No.: 001-15373
ENTERPRISE FINANCIAL REPORTS FOURTH QUARTER AND FULL 2018 YEAR RESULTS
2018 Highlights

• | Net income of $89.2 million, or $3.83 per diluted share

• | Return on average assets of 1.64%

• | Announcement of definitive agreement to acquire Trinity Capital Corporation

Fourth Quarter Highlights

• | Net income of $23.5 million, or $1.02 per diluted share

• | Return on average assets of 1.69%

• | Repurchase of 299,510 shares at an average price of $41.89 per share

St. Louis, Mo. January 21, 2019. Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company” or “EFSC”) reported net income of $89.2 million, or $3.83 per diluted share, for the year ended December 31, 2018, an increase of $41.0 million, or 85%, compared to $48.2 million, or $2.07 per diluted share for the prior year period. Growth in net interest income, maintaining net interest margin, and fee income expansion drove the pre-tax earnings increase over the prior year. Additionally, the Company benefited from a reduction in income tax expense as a result of H.R.1, formerly known as “Tax Cuts and Jobs Act,” which was signed into law on December 22, 2017, as well as the Company’s tax planning initiatives. The Company also experienced a reduction in income tax expense due to the deferred tax asset revaluation charge of $12.1 million incurred in 2017 resulting from the Tax Cuts and Jobs Act.
The Company recorded net income of $23.5 million, or $1.02 per diluted share, for the quarter ended December 31, 2018, an increase of $1.0 million, or 4%, compared to $22.5 million, or $0.97 per diluted share, for the linked third quarter. An increase in net interest income driven by loan growth and a higher average loan yield, and seasonally strong sales of tax credits contributed to the increase over the linked quarter. Fourth quarter included $1.3 million pretax, or $0.04 per diluted share, of merger related expenses. Non-core acquired asset contribution was $3.2 million pretax, or $0.10 per diluted share.
On November 1, 2018, the Company and its wholly-owned subsidiary bank, Enterprise Bank & Trust, entered into a definitive agreement with Trinity Capital Corporation (“Trinity”) and its wholly-owned bank subsidiary, Los Alamos National Bank (“LANB”), pursuant to which the Company will acquire Trinity and LANB. Pursuant to the terms of the definitive agreement, upon consummation of the proposed transaction, Trinity shareholders will receive 0.1972 shares of EFSC common stock and $1.84 in cash for each share of Trinity common stock they hold. Headquartered in Los Alamos, New Mexico, LANB has approximately $1.3 billion in total assets and serves businesses and residents in Northern New Mexico and the Albuquerque metro area through its six full-service locations. The proposed transaction has been approved by the Federal Deposit Insurance Corporation, and remains subject to the approval of Trinity’s shareholders. The Company expects to consummate the proposed transaction in early 2019.

The Company’s Board of Directors approved the Company’s quarterly dividend of $0.14 per common share for the first quarter of 2019, an increase from $0.13 for the fourth quarter of 2018, payable on March 29, 2019 to shareholders of record as of March 15, 2019.
Jim Lally, EFSC’s President and Chief Executive Officer, commented, “2018 and fourth quarter net earnings are both record highs for our Company. Our C&I business model continues to perform well in the current interest rate environment. Our results are also bolstered by prudent growth, as well as our continued operating leverage and capital management activities.
Lally added, “We enter 2019 with earnings momentum, a strong balance sheet, and low levels of nonperforming assets; as well as the prospect of further, quality diversification of our business model with the pending acquisition of Trinity and LANB.”
Net Interest Income
Net interest income for the year ended December 31, 2018 totaled $191.9 million, an increase of $14.6 million, or 8%, compared to $177.3 million for the prior year. Net interest margin, on a fully tax equivalent basis, was 3.82% for 2018 compared to 3.88% for the prior year. Core net interest income 1 growth of $18.6 million was due to organic growth in portfolio loan balances funded principally by core deposits, and a three basis point expansion of core net interest margin 1 discussed below. Additionally, non-core acquired assets 1 contributed $3.7 million to net interest income during 2018, but continued declining balances in this portfolio led to a $4.0 million decline in net interest income from 2017 levels.
Net interest income for the fourth quarter of 2018 totaled $50.6 million, an increase of $2.5 million, from the third quarter of 2018. Core net interest income 1 expanded by $0.9 million due to an increase in average earning assets of $46 million in the quarter, driven by portfolio loan growth trends and a higher average loan yield. Additionally, incremental accretion income on non-core acquired assets 1 increased to $2.1 million from $0.5 million, due primarily to a $1.6 million cash recovery.
Core net interest margin 1 excludes incremental accretion on non-core acquired loans. See the table below for a quarterly and annual comparison.

| For the Quarter ended |  | For the Year ended
($ in thousands) | December 31, 2018 |  | September 30, 2018 |  | December 31, 2017 |  | December 31, 2018 |  | December 31, 2017
Net interest income | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,404 |  |  | $ | 191,905 |  |  | $ | 177,304 |
Less: Incremental accretion income | $ | 2,109 |  |  | $ | 535 |  |  | $ | 2,503 |  |  | $ | 3,701 |  |  | $ | 7,718 |
Core net interest income 1 | $ | 48,484 |  |  | $ | 47,558 |  |  | $ | 44,901 |  |  | $ | 188,204 |  |  | $ | 169,586 |
Net interest margin (fully tax equivalent) | 3.94 | % |  | 3.78 | % |  | 3.93 | % |  | 3.82 | % |  | 3.88 | %
Core net interest margin 1 (fully tax equivalent) | 3.77 | % |  | 3.74 | % |  | 3.73 | % |  | 3.75 | % |  | 3.72 | %

1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
2

Average Balance Sheet
The following tables present, for the periods indicated, certain information related to our average interest-earning assets and interest-bearing liabilities, as well as, the corresponding interest rates earned and paid, all on a tax equivalent basis.

| For the Quarter ended
| December 31, 2018 |  | September 30, 2018 |  | December 31, 2017
($ in thousands) | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate |  | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate |  | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, excluding incremental accretion* | $ | 4,272,132 |  |  | $ | 56,431 |  |  | 5.24 | % |  | $ | 4,252,525 |  |  | $ | 54,968 |  |  | 5.13 | % |  | $ | 4,025,789 |  |  | $ | 47,929 |  |  | 4.72 | %
Investments in debt and equity securities* | 769,461 |  |  | 5,291 |  |  | 2.73 |  |  | 755,129 |  |  | 5,154 |  |  | 2.71 |  |  | 708,481 |  |  | 4,505 |  |  | 2.52 |
Short-term investments | 76,726 |  |  | 364 |  |  | 1.88 |  |  | 64,919 |  |  | 306 |  |  | 1.87 |  |  | 92,001 |  |  | 267 |  |  | 1.15 |
Total earning assets | 5,118,319 |  |  | 62,086 |  |  | 4.81 |  |  | 5,072,573 |  |  | 60,428 |  |  | 4.73 |  |  | 4,826,271 |  |  | 52,701 |  |  | 4.33 |
Noninterest-earning assets | 400,421 |  |  |  |  |  |  | 398,931 |  |  |  |  |  |  | 399,912 |  |  |  |  |
Total assets | $ | 5,518,740 |  |  |  |  |  |  | $ | 5,471,504 |  |  |  |  |  |  | $ | 5,226,183 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing transaction accounts | $ | 864,175 |  |  | $ | 1,221 |  |  | 0.56 | % |  | $ | 758,621 |  |  | $ | 799 |  |  | 0.42 | % |  | $ | 850,612 |  |  | $ | 474 |  |  | 0.22 | %
Money market accounts | 1,541,832 |  |  | 6,140 |  |  | 1.58 |  |  | 1,523,822 |  |  | 5,423 |  |  | 1.41 |  |  | 1,327,914 |  |  | 2,867 |  |  | 0.86 |
Savings | 206,503 |  |  | 168 |  |  | 0.32 |  |  | 208,057 |  |  | 157 |  |  | 0.30 |  |  | 202,269 |  |  | 127 |  |  | 0.25 |
Certificates of deposit | 696,803 |  |  | 3,053 |  |  | 1.74 |  |  | 678,214 |  |  | 2,878 |  |  | 1.68 |  |  | 613,442 |  |  | 1,757 |  |  | 1.14 |
Total interest-bearing deposits | 3,309,313 |  |  | 10,582 |  |  | 1.27 |  |  | 3,168,714 |  |  | 9,257 |  |  | 1.16 |  |  | 2,994,237 |  |  | 5,225 |  |  | 0.69 |
Subordinated debentures | 118,146 |  |  | 1,493 |  |  | 5.01 |  |  | 118,134 |  |  | 1,483 |  |  | 4.98 |  |  | 118,098 |  |  | 1,327 |  |  | 4.46 |
FHLB advances | 178,185 |  |  | 1,121 |  |  | 2.50 |  |  | 311,522 |  |  | 1,729 |  |  | 2.20 |  |  | 191,978 |  |  | 672 |  |  | 1.39 |
Other borrowed funds | 152,422 |  |  | 213 |  |  | 0.55 |  |  | 160,151 |  |  | 195 |  |  | 0.48 |  |  | 201,740 |  |  | 161 |  |  | 0.32 |
Total interest-bearing liabilities | 3,758,066 |  |  | 13,409 |  |  | 1.42 |  |  | 3,758,521 |  |  | 12,664 |  |  | 1.34 |  |  | 3,506,053 |  |  | 7,385 |  |  | 0.84 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 1,125,321 |  |  |  |  |  |  | 1,086,809 |  |  |  |  |  |  | 1,121,140 |  |  |  |  |
Other liabilities | 37,489 |  |  |  |  |  |  | 39,409 |  |  |  |  |  |  | 42,996 |  |  |  |  |
Total liabilities | 4,920,876 |  |  |  |  |  |  | 4,884,739 |  |  |  |  |  |  | 4,670,189 |  |  |  |  |
Shareholders' equity | 597,864 |  |  |  |  |  |  | 586,765 |  |  |  |  |  |  | 555,994 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 5,518,740 |  |  |  |  |  |  | $ | 5,471,504 |  |  |  |  |  |  | $ | 5,226,183 |  |  |  |  |
Core net interest income 1 |  |  | 48,677 |  |  |  |  |  |  | 47,764 |  |  |  |  |  |  | 45,316 |  |  |
Core net interest margin 1 |  |  |  |  | 3.77 | % |  |  |  |  |  | 3.74 | % |  |  |  |  |  | 3.73 | %
Incremental accretion on non-core acquired loans |  |  | 2,109 |  |  |  |  |  |  | 535 |  |  |  |  |  |  | 2,503 |  |  |
Total net interest income |  |  | $ | 50,786 |  |  |  |  |  |  | $ | 48,299 |  |  |  |  |  |  | $ | 47,819 |  |  |
Net interest margin |  |  |  |  | 3.94 | % |  |  |  |  |  | 3.78 | % |  |  |  |  |  | 3.93 | %
* Non-taxable income is presented on a fully tax-equivalent basis using a 24.7% and 38.0% tax rate in 2018 and 2017, respectively. The tax-equivalent adjustments were $0.2 million for the three months ended December 31, 2018, and September 30, 2018, respectively, and $0.4 million for the three months ended December 31, 2017.

1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
3

| For the Year ended
| December 31, 2018 |  | December 31, 2017
($ in thousands) | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate |  | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate
Assets |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |
Loans, excluding incremental accretion* | $ | 4,222,359 |  |  | $ | 213,980 |  |  | 5.07 | % |  | $ | 3,850,879 |  |  | $ | 178,749 |  |  | 4.64 | %
Investments in debt and equity securities* | 752,265 |  |  | 19,801 |  |  | 2.63 |  |  | 681,414 |  |  | 17,078 |  |  | 2.51 |
Short-term investments | 66,771 |  |  | 1,141 |  |  | 1.71 |  |  | 79,377 |  |  | 804 |  |  | 1.01 |
Total earning assets | 5,041,395 |  |  | 234,922 |  |  | 4.66 |  |  | 4,611,670 |  |  | 196,631 |  |  | 4.26 |
Noninterest-earning assets | 395,568 |  |  |  |  |  |  | 368,559 |  |  |  |  |
Total assets | $ | 5,436,963 |  |  |  |  |  |  | $ | 4,980,229 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-bearing transaction accounts | $ | 827,155 |  |  | $ | 3,643 |  |  | 0.44 | % |  | $ | 802,993 |  |  | $ | 2,195 |  |  | 0.27 | %
Money market accounts | 1,488,238 |  |  | 19,361 |  |  | 1.30 |  |  | 1,286,796 |  |  | 8,708 |  |  | 0.68 |
Savings | 206,286 |  |  | 597 |  |  | 0.29 |  |  | 189,516 |  |  | 459 |  |  | 0.24 |
Certificates of deposit | 653,486 |  |  | 10,168 |  |  | 1.56 |  |  | 586,115 |  |  | 5,838 |  |  | 1.00 |
Total interest-bearing deposits | 3,175,165 |  |  | 33,769 |  |  | 1.06 |  |  | 2,865,420 |  |  | 17,200 |  |  | 0.60 |
Subordinated debentures | 118,129 |  |  | 5,798 |  |  | 4.91 |  |  | 116,707 |  |  | 5,095 |  |  | 4.37 |
FHLB advances | 271,493 |  |  | 5,556 |  |  | 2.05 |  |  | 192,489 |  |  | 2,356 |  |  | 1.22 |
Other borrowed funds | 171,736 |  |  | 774 |  |  | 0.45 |  |  | 221,766 |  |  | 584 |  |  | 0.26 |
Total interest-bearing liabilities | 3,736,523 |  |  | 45,897 |  |  | 1.23 |  |  | 3,396,382 |  |  | 25,235 |  |  | 0.74 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 1,086,863 |  |  |  |  |  |  | 1,017,660 |  |  |  |  |
Other liabilities | 36,617 |  |  |  |  |  |  | 33,881 |  |  |  |  |
Total liabilities | 4,860,003 |  |  |  |  |  |  | 4,447,923 |  |  |  |  |
Shareholders’ equity | 576,960 |  |  |  |  |  |  | 532,306 |  |  |  |  |
Total liabilities and shareholders’ equity | $ | 5,436,963 |  |  |  |  |  |  | $ | 4,980,229 |  |  |  |  |
Core net interest income 1 |  |  | 189,025 |  |  |  |  |  |  | 171,396 |  |  |
Core net interest margin 1 |  |  |  |  | 3.75 | % |  |  |  |  |  | 3.72 | %
Incremental accretion on non-core acquired loans |  |  | 3,700 |  |  |  |  |  |  | 7,718 |  |  |
Total net interest income |  |  | $ | 192,725 |  |  |  |  |  |  | $ | 179,114 |  |  |
Net interest margin |  |  |  |  | 3.82 | % |  |  |  |  |  | 3.88 | %
* Non-taxable income is presented on a fully tax-equivalent basis using a 24.7% and 38.0% tax rate in 2018 and 2017, respectively. The tax-equivalent adjustments were $0.8 million, and $1.8 million for the years ended December 31, 2018, and 2017, respectively.

Core net interest margin 1 increased three basis points to 3.75% during 2018. This increase was primarily due to the impact of interest rate increases on the Company's asset sensitive balance sheet. Specifically, the yield on loans, excluding incremental accretion on non-core acquired loans, increased 43 basis points to 5.07% from 4.64% due to the effect of
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
4

increasing interest rates on the existing variable-rate loan portfolio and higher rates on newly originated loans. The cost of total deposits also increased 46 basis points from the prior year period to 1.06% for the year ended December 31, 2018. The increase in the interest rate paid on deposits reflects market interest rate trends, as the Company continues to defend existing and attract new core deposit relationships. Additionally, the cost of total interest-bearing liabilities increased 49 basis points to 1.23% for the year ended December 31, 2018 from 0.74% for the prior year period.
The Company continues to manage its balance sheet to grow net interest income and expects to maintain core net interest margin 1 over the coming quarters; however, pressure on funding costs could negate the expected trends in core net interest margin 1.
Portfolio Loans
The following table presents portfolio loans with selected specialized lending detail for the most recent five quarters.

| At the Quarter ended
($ in thousands) | Dec 31, 2018 |  | Sept 30, 2018 |  | June 30, 2018 |  | March 31, 2018 |  | Dec 31, 2017
C&I - general | $ | 994,057 |  |  | $ | 967,525 |  |  | $ | 990,153 |  |  | $ | 945,682 |  |  | $ | 936,588 |
CRE investor owned - general | 857,428 |  |  | 841,310 |  |  | 836,516 |  |  | 836,499 |  |  | 801,156 |
CRE owner occupied - general | 494,630 |  |  | 480,106 |  |  | 493,589 |  |  | 471,417 |  |  | 468,151 |
Enterprise value lending a | 465,992 |  |  | 442,439 |  |  | 442,877 |  |  | 439,352 |  |  | 407,644 |
Life insurance premium financing a | 417,950 |  |  | 378,826 |  |  | 358,787 |  |  | 365,377 |  |  | 364,876 |
Residential real estate - general | 299,518 |  |  | 309,053 |  |  | 318,841 |  |  | 328,966 |  |  | 342,140 |
Construction and land development - general | 308,086 |  |  | 309,879 |  |  | 286,482 |  |  | 293,938 |  |  | 294,123 |
Tax credits a | 262,735 |  |  | 256,666 |  |  | 260,595 |  |  | 244,088 |  |  | 234,835 |
Agriculture | 135,849 |  |  | 137,760 |  |  | 127,849 |  |  | 118,862 |  |  | 91,031 |
Consumer and other - general | 96,880 |  |  | 126,194 |  |  | 136,647 |  |  | 117,901 |  |  | 126,115 |
Portfolio loans | 4,333,125 |  |  | 4,249,758 |  |  | 4,252,336 |  |  | 4,162,082 |  |  | 4,066,659 |
Non-core acquired | 16,876 |  |  | 17,672 |  |  | 23,425 |  |  | 28,763 |  |  | 30,391 |
Total Loans | $ | 4,350,001 |  |  | $ | 4,267,430 |  |  | $ | 4,275,761 |  |  | $ | 4,190,845 |  |  | $ | 4,097,050 |
Portfolio loan yield | 5.23 | % |  | 5.12 | % |  | 4.99 | % |  | 4.87 | % |  | 4.71 | %
Total loan yield | 5.44 | % |  | 5.18 | % |  | 5.04 | % |  | 4.96 | % |  | 4.97 | %
Total C&I loans to total loans | 49 | % |  | 48 | % |  | 48 | % |  | 48 | % |  | 47 | %
Variable interest rate loans to total loans | 62 | % |  | 62 | % |  | 60 | % |  | 59 | % |  | 58 | %
a Specialized categories may include a mix of C&I, CRE, Construction and land development, or Consumer and other loans.

Portfolio loans totaled $4.3 billion at December 31, 2018, increasing $83 million, or 8% annualized, compared to the linked quarter. On a year-over-year basis, portfolio loans increased $266 million, or 7%. We expect continued loan growth in 2019 to be a high single digit percentage, exclusive of the impact of the pending acquisition of Trinity and LANB.
The Company continues to focus on originating high-quality commercial and industrial (“C&I”) relationships, as they typically have variable interest rates and allow for cross selling opportunities involving other banking products. C&I loans increased $202 million, or 11%, since December 31, 2017, of which $88 million occurred during the fourth quarter of 2018. The increase in C&I loans for the quarter was due primarily to seasonally strong growth in life insurance premium finance loans, which added $39 million, while general C&I loans increased $27 million from continued successful business development. Additionally, within the C&I category, Enterprise Value Lending (“EVL”) loans grew $24 million, and tax credits increased $6 million.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
5

Non-core acquired loans were those acquired from the FDIC and were previously covered by shared-loss agreements. These loans continue to be accounted for as purchased credit impaired (“PCI”) loans. At December 31, 2018 the remaining accretable yield on non-core acquired assets was estimated to be $9 million, and the non-accretable difference was approximately $7 million.
Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters.

| For the Quarter ended
($ in thousands) | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018 |  | December 31, 2017
Nonperforming loans | $ | 16,745 |  |  | $ | 17,044 |  |  | $ | 14,801 |  |  | $ | 15,582 |  |  | $ | 15,687 |
Other real estate | 469 |  |  | 408 |  |  | 454 |  |  | 455 |  |  | 498 |
Nonperforming assets | $ | 17,214 |  |  | $ | 17,452 |  |  | $ | 15,255 |  |  | $ | 16,037 |  |  | $ | 16,185 |
Nonperforming loans to total loans | 0.38 | % |  | 0.40 | % |  | 0.35 | % |  | 0.37 | % |  | 0.38 | %
Nonperforming assets to total assets | 0.30 | % |  | 0.32 | % |  | 0.28 | % |  | 0.30 | % |  | 0.31 | %
Allowance for loan losses to total loans | 1.00 | % |  | 1.04 | % |  | 1.04 | % |  | 1.07 | % |  | 1.04 | %
Net charge-offs (recoveries) | $ | 2,822 |  |  | $ | 2,447 |  |  | $ | 641 |  |  | $ | (226 | ) |  | $ | 3,313 |

For the year ended December 31, 2018, the Company recorded a net provision for loan losses of $6.6 million, compared to $10.1 million for the prior year. The current year included a provision reversal on PCI loans of $3.2 million compared to a provision reversal of $0.6 million for the prior year. Net charge-offs to average loans totaled 0.14% for 2018 compared to 0.27% in 2017. For the quarter ended December 31, 2018, the Company reported a provision for loan losses of $2.1 million, compared to $2.3 million in the linked quarter. The current quarter included a provision reversal on PCI loans of $1.1 million compared to a provision reversal of $0.1 million for the linked quarter. The provision is reflective of charge-offs, continued improvement in cash flow expectations for the PCI portfolio, as well as growth in portfolio loans.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
6

Deposits
The following table presents deposits broken out by type for the most recent five quarters.

| At the Quarter Ended
($ in thousands) | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018 |  | December 31, 2017
Noninterest-bearing accounts | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |  |  | $ | 1,123,907 |
Interest-bearing transaction accounts | 1,037,684 |  |  | 743,351 |  |  | 754,819 |  |  | 875,880 |  |  | 915,653 |
Money market and savings accounts | 1,765,154 |  |  | 1,730,762 |  |  | 1,768,793 |  |  | 1,655,488 |  |  | 1,538,081 |
Brokered certificates of deposit | 198,981 |  |  | 202,323 |  |  | 224,192 |  |  | 201,082 |  |  | 115,306 |
Other certificates of deposit | 485,448 |  |  | 471,914 |  |  | 449,139 |  |  | 447,222 |  |  | 463,467 |
Total deposit portfolio | $ | 4,587,985 |  |  | $ | 4,210,476 |  |  | $ | 4,247,912 |  |  | $ | 4,281,377 |  |  | $ | 4,156,414 |
Noninterest-bearing deposits to total deposits | 24 | % |  | 25 | % |  | 25 | % |  | 26 | % |  | 27 | %

Total deposits at December 31, 2018 were $4.6 billion, an increase of $378 million, or 36% annualized, from September 30, 2018, and an increase of $432 million, or 10%, from December 31, 2017.
Core deposits, defined as total deposits excluding time deposits, were $3.9 billion at December 31, 2018, an increase of $367 million, or 41% on an annualized basis, from the linked quarter, and an increase of $326 million, or 9%, from the prior year period. Along with normal seasonal deposit growth, the Company continues to strengthen and diversify the funding base across all regions.
Noninterest-bearing deposits increased $39 million compared to September 30, 2018, and decreased $23 million compared to December 31, 2017. The total cost of deposits increased nine basis points to 0.95% at December 31, 2018 compared to 0.86% at September 30, 2018, and also increased 45 basis points from 0.50% at December 31, 2017. The cost of deposits reflects interest rate conditions for existing clients as well as rates for new customers.
Noninterest Income
Total noninterest income for the year was $38.3 million, an increase of $4.0 million, or 11% from 2017. This improvement was primarily due to higher income from deposit service charges, card services, and other miscellaneous income from non-core acquired assets and the sale of an equity partnership.
For the full year:

◦ | Deposit service charges increased $0.7 million or 6%

◦ | Income from card services increased $1.3 million or 23%

◦ | Other income increased $1.7 million or 24%

For the quarter ended December 31, 2018, total noninterest income was $10.7 million, an increase of $2.3 million, or 27%, from the linked quarter. Gains from tax credit brokerage activities, net of fair value market adjustments, were $2.3 million for the fourth quarter of 2018, compared to $0.2 million for the linked third quarter. Sales of tax credits can vary by quarter, but generally occur in the first and fourth quarters of the year depending on client demand and availability of the tax credits.
The Company expects growth in noninterest income of a high single digit percentage for 2019 over 2018 levels, exclusive of the impact of the pending acquisition of Trinity and LANB.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
7

Noninterest Expenses
Noninterest expenses for the year were $119.0 million, an increase of $4.0 million, or 3% from 2017. Increases in employee compensation and benefits and other miscellaneous expenses primarily consisting of tax credit investment amortization expense were partially offset by a reduction in merger related expenses. The Company’s efficiency ratio was 51.70% for 2018, compared to 54.35% for the prior year. The Company’s core efficiency ratio 1 was 52.04% for 2018, compared to 52.93% for the prior year.
For the quarter ended December 31, 2018, noninterest expenses were $30.7 million, an increase of $0.8 million, or 3% from the linked quarter. Included in the fourth quarter expenses were merger related expenses totaling $1.3 million. The fourth quarter’s resulting efficiency ratio was 50.16%, compared to 52.96% for the linked quarter. The Company’s core efficiency ratio 1 was 49.77% for the fourth quarter compared to 52.23% for the linked quarter. The decrease from the linked quarter is reflective of higher income, including seasonal tax credit activity, and holding noninterest expense steady.
The Company expects to continue to invest in revenue producing associates and other infrastructure that supports additional growth. These investments are expected to result in expense growth, at a rate of 35% - 45% of projected revenue growth for 2019, resulting in continued improvements to the Company’s efficiency ratio, exclusive of the impact of the pending acquisition of Trinity and LANB.
Income Taxes
The Company’s effective tax rate was 14.7% for the year ended December 31, 2018 compared to 44.3% for the prior year. The lower corporate federal tax rate for 2018 and other tax planning activities reduced income tax expense. Additionally, as a result of changes to U.S. corporate tax laws in 2017, a revaluation of the Company’s deferred tax assets resulted in a $12.1 million charge in the prior year period.
The Company expects its effective tax rate for 2019 to be approximately 18% - 20%.
Capital

| At the Quarter ended
Percent | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018 |  | December 31, 2017
Total risk-based capital to risk-weighted assets | 13.02 | % |  | 12.94 | % |  | 12.60 | % |  | 12.41 | % |  | 12.21 | %
Common equity tier 1 capital to risk-weighted assets | 9.79 | % |  | 9.66 | % |  | 9.32 | % |  | 9.07 | % |  | 8.88 | %
Tangible common equity to tangible assets 1 | 8.66 | % |  | 8.54 | % |  | 8.30 | % |  | 8.13 | % |  | 8.14 | %

In the fourth quarter of 2018, as part of its capital management efforts, the Company repurchased 299,510 shares of its common stock for $12.5 million pursuant to its publicly announced share repurchase program.
Capital ratios for the current quarter are based on the Basel III regulatory capital framework as applied to the Company’s current businesses and operations, and are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review and implementation guidance. The attached tables contain a reconciliation of these ratios to U.S. GAAP financial measures.
Use of Non-GAAP Financial Measures 1
The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as net interest margin, efficiency ratios, regulatory capital ratios, and the tangible common equity ratio, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
8

numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Commencing in the fourth quarter of 2018, due to declining balances in the non-core acquired loan portfolio, the Company determined to no longer report core earnings, which is a non-GAAP measure, on a full income statement presentation basis as the variance to the most directly comparable GAAP measure is now insignificant and to avoid any suggestion that such non-GAAP presentation exhibits prominence over the most directly comparable GAAP measure.
The Company considers its core net interest margin and core efficiency ratio, collectively “core performance measures” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of non-core acquired loans and related income and expenses, the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures include contractual interest on non-core acquired loans, but exclude incremental accretion on these loans. Core performance measures also exclude the gain or loss on sale of other real estate from non-core acquired loans, and expenses directly related to non-core acquired loans and other assets formerly covered under FDIC loss share agreements. Core performance measures also exclude certain other income and expense items, such as executive separation costs, merger related expenses, facilities charges, deferred tax asset revaluation, and the gain or loss on sale of investment securities, the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis. The attached tables contain a reconciliation of these core performance measures to the GAAP measures. The Company believes that the tangible common equity ratio provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.
The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength. The Company’s management uses, and believes that investors benefit from referring to, these non-GAAP measures and ratios in assessing the Company’s operating results and related trends and when forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP. In the attached tables, the Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
Conference Call and Webcast Information
The Company will host a conference call and webcast at 2:30 p.m. Central time on Tuesday, January 22, 2019. During the call, management will review the fourth quarter and full year of 2018 results and related matters. This press release as well as a related slide presentation will be accessible on the Company’s website at www.enterprisebank.com under “Investor Relations” beginning prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-888-394-8218 (Conference ID #2572790). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC4Q2018earnings and register to receive a dial in number, passcode, and pin number. The replay will be available for approximately two weeks following the conference call.
Enterprise Financial Services Corp operates commercial banking and wealth management businesses in metropolitan St. Louis, Kansas City, and Phoenix. The Company is primarily focused on serving the needs of privately held businesses, their owner families, executives and professionals.
Forward-looking Statements
Readers should note that, in addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements about the Company’s plans, expectations, and projections of future financial and operating results, as well as statements regarding the Company’s plans, objectives, expectations or consequences of announced transactions. The Company uses words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
9

“potential,” “could,” “continue,” and “intend”, and variations of such words and similar expressions, in this release to identify such forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic conditions, risks associated with rapid increases or decreases in prevailing interest rates, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in regulatory requirements, changes in accounting regulation or standards applicable to banks, as well as other risk factors described in the Company’s 2017 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events unless required under the federal securities laws.
No Offer or Solicitation
This communication relates to a proposed merger and business combination transaction (the “Merger”) between the Company and Trinity. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any new securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the Merger or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Additional Information and Where to Find It
In connection with the proposed Merger, the Company has filed with the SEC on December 31, 2018 an amendment to the registration statement on Form S-4 (File No. 333-228751) that was originally filed on December 11, 2018 that includes a preliminary proxy statement/prospectus. The Company will also file other documents with the SEC regarding the Merger, including the definitive proxy statement/prospectus. The information in the preliminary proxy statement/prospectus is not complete and may be changed. The definitive proxy statement/prospectus will be sent to the shareholders of Trinity once the registration statement is declared effective by the SEC. This document is not a substitute for the registration statement and preliminary proxy statement/prospectus filed with the SEC, including any amendments or supplements thereto, or any other documents that the Company may file with the SEC or that the Company or Trinity may send to stockholders of the Company or shareholders of Trinity in connection with the Merger. INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND TRINITY ARE URGED TO READ THE REGISTRATION STATEMENT, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND RELATED MATTERS. Investors and security holders are able to obtain free copies of the registration statement and the preliminary proxy statement/prospectus and all other documents filed or that will be filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov.
Participants in Solicitation
The Company, Trinity and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Trinity’s common stock in connection with the proposed Merger. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2018 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 14, 2018 and as amended by supplements to the proxy statement filed with the SEC on March 14, 2018, March 30, 2018, and April 19, 2018. Information about the directors and executive officers of Trinity is set forth in the proxy statement for Trinity’s 2018 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 20, 2018. Additional information regarding the interest of those participants and other persons who may be deemed participants in the Merger may be obtained by reading the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus when it becomes available, and other
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
10

relevant documents filed with the SEC regarding the Merger when they become available. Free copies of these documents may be obtained as described above.
For more information contact:
Investor Relations: Keene Turner, Executive Vice President and CFO (314) 512-7233
Media: Karen Loiterstein, Senior Vice President (314) 512-7141
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
11

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)

| For the Quarter ended/At |  | For the Year ended
($ in thousands, except per share data) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017 |  | Dec 31, 2018 |  | Dec 31, 2017
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,048 |  |  | $ | 46,171 |  |  | $ | 47,404 |  |  | $ | 191,905 |  |  | $ | 177,304 |
Provision for loan losses | 2,120 |  |  | 2,263 |  |  | 390 |  |  | 1,871 |  |  | 2,907 |  |  | 6,644 |  |  | 10,130 |
Noninterest income | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |  |  | 11,112 |  |  | 38,347 |  |  | 34,394 |
Noninterest expense | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |  |  | 28,260 |  |  | 119,031 |  |  | 115,051 |
Income before income tax expense | 28,428 |  |  | 24,318 |  |  | 27,132 |  |  | 24,699 |  |  | 27,349 |  |  | 104,577 |  |  | 86,517 |
Income tax expense 1 | 4,899 |  |  | 1,802 |  |  | 4,881 |  |  | 3,778 |  |  | 19,820 |  |  | 15,360 |  |  | 38,327 |
Net income 1 | $ | 23,529 |  |  | $ | 22,516 |  |  | $ | 22,251 |  |  | $ | 20,921 |  |  | $ | 7,529 |  |  | $ | 89,217 |  |  | $ | 48,190 |
Diluted earnings per share | $ | 1.02 |  |  | $ | 0.97 |  |  | $ | 0.95 |  |  | $ | 0.90 |  |  | $ | 0.32 |  |  | $ | 3.83 |  |  | $ | 2.07 |
Return on average assets | 1.69 | % |  | 1.63 | % |  | 1.65 | % |  | 1.59 | % |  | 0.57 | % |  | 1.64 | % |  | 0.97 | %
Return on average common equity | 15.61 |  |  | 15.22 |  |  | 15.70 |  |  | 15.31 |  |  | 5.37 |  |  | 15.46 |  |  | 9.05 |
Return on average tangible common equity | 19.79 |  |  | 19.42 |  |  | 20.23 |  |  | 19.92 |  |  | 6.99 |  |  | 19.83 |  |  | 11.63 |
Net interest margin (fully tax equivalent) | 3.94 |  |  | 3.78 |  |  | 3.77 |  |  | 3.80 |  |  | 3.93 |  |  | 3.82 |  |  | 3.88 |
Core net interest margin (fully tax equivalent)2 | 3.77 |  |  | 3.74 |  |  | 3.75 |  |  | 3.74 |  |  | 3.73 |  |  | 3.75 |  |  | 3.72 |
Efficiency ratio | 50.16 |  |  | 52.96 |  |  | 51.50 |  |  | 52.31 |  |  | 48.29 |  |  | 51.70 |  |  | 54.35 |
Core efficiency ratio 2 | 49.77 |  |  | 52.23 |  |  | 52.36 |  |  | 54.02 |  |  | 50.24 |  |  | 52.04 |  |  | 52.93 |
Total assets | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |  |  | $ | 5,289,225 |  |  |  |  |
Total average assets | 5,518,740 |  |  | 5,471,504 |  |  | 5,415,151 |  |  | 5,340,112 |  |  | 5,226,183 |  |  | $ | 5,436,963 |  |  | $ | 4,980,229 |
Total deposits | 4,587,985 |  |  | 4,210,476 |  |  | 4,247,912 |  |  | 4,281,377 |  |  | 4,156,414 |  |  |  |  |
Total average deposits | 4,434,634 |  |  | 4,255,523 |  |  | 4,230,291 |  |  | 4,124,326 |  |  | 4,115,377 |  |  | 4,262,028 |  |  | 3,883,080 |
Period end common shares outstanding | 22,812 |  |  | 23,092 |  |  | 23,141 |  |  | 23,111 |  |  | 23,089 |  |  |  |  |
Dividends per common share | $ | 0.13 |  |  | $ | 0.12 |  |  | $ | 0.11 |  |  | $ | 0.11 |  |  | $ | 0.11 |  |  | $ | 0.47 |  |  | $ | 0.44 |
Tangible book value per common share | $ | 20.95 |  |  | $ | 19.94 |  |  | $ | 19.32 |  |  | $ | 18.49 |  |  | $ | 18.20 |  |  |  |  |
Tangible common equity to tangible assets 2 | 8.66 | % |  | 8.54 | % |  | 8.30 | % |  | 8.13 | % |  | 8.14 | % |  |  |  |
Total risk-based capital to risk-weighted assets | 13.02 |  |  | 12.94 |  |  | 12.60 |  |  | 12.41 |  |  | 12.21 |  |  |  |  |
1 Includes $12.1 million ($0.52) per diluted share) deferred tax asset revaluation charge for the quarter and year ended December 31, 2017 due to U.S. corporate income tax reform.
2 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

12

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

| For the Quarter ended |  | For the Year ended
($ in thousands, except per share data) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017 |  | Dec 31, 2018 |  | Dec 31, 2017
INCOME STATEMENTS |  |  |  |  |  |  |  |  |  |  |  |  |
NET INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Total interest income | $ | 64,002 |  |  | $ | 60,757 |  |  | $ | 57,879 |  |  | $ | 55,164 |  |  | $ | 54,789 |  |  | $ | 237,802 |  |  | $ | 202,539 |
Total interest expense | 13,409 |  |  | 12,664 |  |  | 10,831 |  |  | 8,993 |  |  | 7,385 |  |  | 45,897 |  |  | 25,235 |
Net interest income | 50,593 |  |  | 48,093 |  |  | 47,048 |  |  | 46,171 |  |  | 47,404 |  |  | 191,905 |  |  | 177,304 |
Provision for loan losses | 2,120 |  |  | 2,263 |  |  | 390 |  |  | 1,871 |  |  | 2,907 |  |  | 6,644 |  |  | 10,130 |
Net interest income after provision for loan losses | 48,473 |  |  | 45,830 |  |  | 46,658 |  |  | 44,300 |  |  | 44,497 |  |  | 185,261 |  |  | 167,174 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit service charges | 2,894 |  |  | 2,997 |  |  | 3,007 |  |  | 2,851 |  |  | 2,897 |  |  | 11,749 |  |  | 11,043 |
Wealth management revenue | 1,974 |  |  | 2,012 |  |  | 2,141 |  |  | 2,114 |  |  | 2,153 |  |  | 8,241 |  |  | 8,102 |
Card services revenue | 1,760 |  |  | 1,760 |  |  | 1,650 |  |  | 1,516 |  |  | 1,545 |  |  | 6,686 |  |  | 5,433 |
Tax credit activity, net | 2,312 |  |  | 192 |  |  | 64 |  |  | 252 |  |  | 2,249 |  |  | 2,820 |  |  | 2,581 |
Gain (loss) on sale of other real estate | — |  |  | 13 |  |  | — |  |  | — |  |  | 76 |  |  | 13 |  |  | 93 |
Gain on sale of investment securities | — |  |  | — |  |  | — |  |  | 9 |  |  | — |  |  | 9 |  |  | 22 |
Other income | 1,762 |  |  | 1,436 |  |  | 2,831 |  |  | 2,800 |  |  | 2,192 |  |  | 8,829 |  |  | 7,120 |
Total noninterest income | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |  |  | 11,112 |  |  | 38,347 |  |  | 34,394 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation and benefits | 16,669 |  |  | 16,297 |  |  | 16,582 |  |  | 16,491 |  |  | 15,292 |  |  | 66,039 |  |  | 61,388 |
Occupancy | 2,408 |  |  | 2,394 |  |  | 2,342 |  |  | 2,406 |  |  | 2,429 |  |  | 9,550 |  |  | 9,057 |
Merger related expenses | 1,271 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,271 |  |  | 6,462 |
Other | 10,399 |  |  | 11,231 |  |  | 10,295 |  |  | 10,246 |  |  | 10,539 |  |  | 42,171 |  |  | 38,144 |
Total noninterest expenses | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |  |  | 28,260 |  |  | 119,031 |  |  | 115,051 |
Income before income tax expense | 28,428 |  |  | 24,318 |  |  | 27,132 |  |  | 24,699 |  |  | 27,349 |  |  | 104,577 |  |  | 86,517 |
Income tax expense | 4,899 |  |  | 1,802 |  |  | 4,881 |  |  | 3,778 |  |  | 19,820 |  |  | 15,360 |  |  | 38,327 |
Net income | $ | 23,529 |  |  | $ | 22,516 |  |  | $ | 22,251 |  |  | $ | 20,921 |  |  | $ | 7,529 |  |  | $ | 89,217 |  |  | $ | 48,190 |
Basic earnings per share | $ | 1.02 |  |  | $ | 0.97 |  |  | $ | 0.96 |  |  | $ | 0.91 |  |  | $ | 0.33 |  |  | $ | 3.86 |  |  | $ | 2.10 |
Diluted earnings per share | 1.02 |  |  | 0.97 |  |  | 0.95 |  |  | 0.90 |  |  | 0.32 |  |  | 3.83 |  |  | 2.07 |

13

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

| At the Quarter ended
($ in thousands) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017
BALANCE SHEETS |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 91,511 |  |  | $ | 78,119 |  |  | $ | 91,851 |  |  | $ | 81,604 |  |  | $ | 91,084 |
Interest-earning deposits | 108,226 |  |  | 81,351 |  |  | 87,586 |  |  | 63,897 |  |  | 64,884 |
Debt and equity investments | 813,702 |  |  | 775,344 |  |  | 756,203 |  |  | 752,114 |  |  | 741,792 |
Loans held for sale | 392 |  |  | 738 |  |  | 1,388 |  |  | 1,748 |  |  | 3,155 |
Loans | 4,350,001 |  |  | 4,267,430 |  |  | 4,275,761 |  |  | 4,190,845 |  |  | 4,097,050 |
Less: Allowance for loan losses | 43,476 |  |  | 44,186 |  |  | 44,370 |  |  | 44,650 |  |  | 42,577 |
Total loans, net | 4,306,525 |  |  | 4,223,244 |  |  | 4,231,391 |  |  | 4,146,195 |  |  | 4,054,473 |
Other real estate | 469 |  |  | 408 |  |  | 454 |  |  | 455 |  |  | 498 |
Fixed assets, net | 32,109 |  |  | 32,354 |  |  | 32,814 |  |  | 32,127 |  |  | 32,618 |
Tax credits, held for sale | 37,587 |  |  | 45,625 |  |  | 46,481 |  |  | 42,364 |  |  | 43,468 |
Goodwill | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Intangible assets, net | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |  |  | 11,056 |
Other assets | 129,243 |  |  | 153,863 |  |  | 134,643 |  |  | 134,854 |  |  | 128,852 |
Total assets | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |  |  | $ | 5,289,225 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Noninterest-bearing deposits | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |  |  | $ | 1,123,907 |
Interest-bearing deposits | 3,487,267 |  |  | 3,148,350 |  |  | 3,196,943 |  |  | 3,179,672 |  |  | 3,032,507 |
Total deposits | 4,587,985 |  |  | 4,210,476 |  |  | 4,247,912 |  |  | 4,281,377 |  |  | 4,156,414 |
Subordinated debentures | 118,156 |  |  | 118,144 |  |  | 118,131 |  |  | 118,118 |  |  | 118,105 |
Federal Home Loan Bank advances | 70,000 |  |  | 401,000 |  |  | 361,534 |  |  | 224,624 |  |  | 172,743 |
Other borrowings | 223,450 |  |  | 161,795 |  |  | 167,216 |  |  | 166,589 |  |  | 253,674 |
Other liabilities | 42,267 |  |  | 39,287 |  |  | 41,047 |  |  | 37,379 |  |  | 39,716 |
Total liabilities | 5,041,858 |  |  | 4,930,702 |  |  | 4,935,840 |  |  | 4,828,087 |  |  | 4,740,652 |
Shareholders’ equity | 603,804 |  |  | 586,837 |  |  | 574,084 |  |  | 555,015 |  |  | 548,573 |
Total liabilities and shareholders’ equity | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |  |  | $ | 5,289,225 |

14

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

| For the Quarter ended
($ in thousands) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017
LOAN PORTFOLIO |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 2,121,446 |  |  | $ | 2,033,278 |  |  | $ | 2,038,400 |  |  | $ | 1,982,086 |  |  | $ | 1,919,145 |
Commercial real estate | 1,474,582 |  |  | 1,443,088 |  |  | 1,445,981 |  |  | 1,413,897 |  |  | 1,363,605 |
Construction real estate | 331,899 |  |  | 329,288 |  |  | 302,514 |  |  | 309,227 |  |  | 305,468 |
Residential real estate | 299,873 |  |  | 309,414 |  |  | 319,208 |  |  | 329,337 |  |  | 342,518 |
Consumer and other | 105,325 |  |  | 134,690 |  |  | 146,233 |  |  | 127,535 |  |  | 135,923 |
Total portfolio loans | 4,333,125 |  |  | 4,249,758 |  |  | 4,252,336 |  |  | 4,162,082 |  |  | 4,066,659 |
Non-core acquired loans | 16,876 |  |  | 17,672 |  |  | 23,425 |  |  | 28,763 |  |  | 30,391 |
Total loans | $ | 4,350,001 |  |  | $ | 4,267,430 |  |  | $ | 4,275,761 |  |  | $ | 4,190,845 |  |  | $ | 4,097,050 |
DEPOSIT PORTFOLIO |  |  |  |  |  |  |  |  |
Noninterest-bearing accounts | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |  |  | $ | 1,123,907 |
Interest-bearing transaction accounts | 1,037,684 |  |  | 743,351 |  |  | 754,819 |  |  | 875,880 |  |  | 915,653 |
Money market and savings accounts | 1,765,154 |  |  | 1,730,762 |  |  | 1,768,793 |  |  | 1,655,488 |  |  | 1,538,081 |
Brokered certificates of deposit | 198,981 |  |  | 202,323 |  |  | 224,192 |  |  | 201,082 |  |  | 115,306 |
Other certificates of deposit | 485,448 |  |  | 471,914 |  |  | 449,139 |  |  | 447,222 |  |  | 463,467 |
Total deposit portfolio | $ | 4,587,985 |  |  | $ | 4,210,476 |  |  | $ | 4,247,912 |  |  | $ | 4,281,377 |  |  | $ | 4,156,414 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |
Portfolio loans | $ | 4,254,180 |  |  | $ | 4,230,089 |  |  | $ | 4,196,875 |  |  | $ | 4,108,400 |  |  | $ | 3,990,233 |
Non-core acquired loans | 17,396 |  |  | 21,891 |  |  | 26,179 |  |  | 29,125 |  |  | 31,957 |
Loans held for sale | 556 |  |  | 544 |  |  | 962 |  |  | 1,445 |  |  | 3,599 |
Debt and equity investments | 769,461 |  |  | 755,129 |  |  | 743,534 |  |  | 740,587 |  |  | 708,481 |
Interest-earning assets | 5,118,319 |  |  | 5,072,573 |  |  | 5,023,607 |  |  | 4,948,875 |  |  | 4,826,271 |
Total assets | 5,518,740 |  |  | 5,471,504 |  |  | 5,415,151 |  |  | 5,340,112 |  |  | 5,226,183 |
Deposits | 4,434,634 |  |  | 4,255,523 |  |  | 4,230,291 |  |  | 4,124,326 |  |  | 4,115,377 |
Shareholders’ equity | 597,864 |  |  | 586,765 |  |  | 568,555 |  |  | 554,066 |  |  | 555,994 |
Tangible common equity | 471,678 |  |  | 459,975 |  |  | 441,136 |  |  | 426,006 |  |  | 427,258 |
YIELDS (fully tax equivalent) |  |  |  |  |  |  |  |  |
Portfolio loans | 5.23 | % |  | 5.12 | % |  | 4.99 | % |  | 4.87 | % |  | 4.71 | %
Non-core acquired loans | 55.99 |  |  | 16.93 |  |  | 12.37 |  |  | 16.60 |  |  | 37.53 |
Total loans | 5.44 |  |  | 5.18 |  |  | 5.04 |  |  | 4.96 |  |  | 4.97 |
Debt and equity investments | 2.73 |  |  | 2.71 |  |  | 2.58 |  |  | 2.50 |  |  | 2.52 |
Interest-earning assets | 4.98 |  |  | 4.77 |  |  | 4.64 |  |  | 4.54 |  |  | 4.54 |
Interest-bearing deposits | 1.27 |  |  | 1.16 |  |  | 0.98 |  |  | 0.82 |  |  | 0.69 |
Total deposits | 0.95 |  |  | 0.86 |  |  | 0.73 |  |  | 0.61 |  |  | 0.50 |
Subordinated debentures | 5.01 |  |  | 4.98 |  |  | 4.94 |  |  | 4.70 |  |  | 4.46 |
Borrowed funds | 1.60 |  |  | 1.62 |  |  | 1.41 |  |  | 1.15 |  |  | 0.84 |
Cost of paying liabilities | 1.42 |  |  | 1.34 |  |  | 1.16 |  |  | 0.99 |  |  | 0.84 |
Net interest margin | 3.94 |  |  | 3.78 |  |  | 3.77 |  |  | 3.80 |  |  | 3.93 |

15

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

| For the Quarter ended
(in thousands, except per share data) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017
ASSET QUALITY |  |  |  |  |  |  |  |  |
Net charge-offs (recoveries) | $ | 2,822 |  |  | $ | 2,447 |  |  | $ | 641 |  |  | $ | (226 | ) |  | $ | 3,313 |
Nonperforming loans | 16,745 |  |  | 17,044 |  |  | 14,801 |  |  | 15,582 |  |  | 15,687 |
Classified assets | 70,126 |  |  | 73,704 |  |  | 74,001 |  |  | 77,195 |  |  | 73,239 |
Nonperforming loans to total loans | 0.38 | % |  | 0.40 | % |  | 0.35 | % |  | 0.37 | % |  | 0.38 | %
Nonperforming assets to total assets | 0.30 |  |  | 0.32 |  |  | 0.28 |  |  | 0.30 |  |  | 0.31 |
Allowance for loan losses to total loans | 1.00 |  |  | 1.04 |  |  | 1.04 |  |  | 1.07 |  |  | 1.04 |
Allowance for loan losses to nonperforming loans | 259.6 |  |  | 259.3 |  |  | 299.8 |  |  | 281.7 |  |  | 271.4 |
Net charge-offs (recoveries) to average loans (annualized) | 0.26 |  |  | 0.23 |  |  | 0.06 |  |  | (0.02 | ) |  | 0.33 |
WEALTH MANAGEMENT |  |  |  |  |  |  |  |  |
Trust assets under management | $ | 1,119,329 |  |  | $ | 1,174,798 |  |  | $ | 1,337,030 |  |  | $ | 1,319,259 |  |  | $ | 1,330,227 |
Trust assets under administration | 1,811,512 |  |  | 1,984,859 |  |  | 2,165,870 |  |  | 2,151,697 |  |  | 2,169,946 |
MARKET DATA |  |  |  |  |  |  |  |  |
Book value per common share | $ | 26.47 |  |  | $ | 25.41 |  |  | $ | 24.81 |  |  | $ | 24.02 |  |  | $ | 23.76 |
Tangible book value per common share | 20.95 |  |  | 19.94 |  |  | 19.32 |  |  | 18.49 |  |  | 18.20 |
Market value per share | 37.63 |  |  | 53.05 |  |  | 53.95 |  |  | 46.90 |  |  | 45.15 |
Period end common shares outstanding | 22,812 |  |  | 23,092 |  |  | 23,141 |  |  | 23,111 |  |  | 23,089 |
Average basic common shares | 23,014 |  |  | 23,148 |  |  | 23,124 |  |  | 23,115 |  |  | 23,069 |
Average diluted common shares | 23,170 |  |  | 23,329 |  |  | 23,318 |  |  | 23,287 |  |  | 23,342 |
CAPITAL |  |  |  |  |  |  |  |  |
Total risk-based capital to risk-weighted assets | 13.02 | % |  | 12.94 | % |  | 12.60 | % |  | 12.41 | % |  | 12.21 | %
Tier 1 capital to risk-weighted assets | 11.14 |  |  | 11.03 |  |  | 10.68 |  |  | 10.46 |  |  | 10.29 |
Common equity tier 1 capital to risk-weighted assets | 9.79 |  |  | 9.66 |  |  | 9.32 |  |  | 9.07 |  |  | 8.88 |
Tangible common equity to tangible assets 1 | 8.66 |  |  | 8.54 |  |  | 8.30 |  |  | 8.13 |  |  | 8.14 |
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

16

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

| For the Quarter ended |  | For the Year ended
($ in thousands, except per share data) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017 |  | Dec 31, 2018 |  | Dec 31, 2017
CORE PERFORMANCE MEASURES |  |  |  |
Net interest income | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,048 |  |  | $ | 46,171 |  |  | $ | 47,404 |  |  | $ | 191,905 |  |  | $ | 177,304 |
Less: Incremental accretion income | 2,109 |  |  | 535 |  |  | 291 |  |  | 766 |  |  | 2,503 |  |  | 3,701 |  |  | 7,718 |
Core net interest income | 48,484 |  |  | 47,558 |  |  | 46,757 |  |  | 45,405 |  |  | 44,901 |  |  | 188,204 |  |  | 169,586 |
Total noninterest income | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |  |  | 11,112 |  |  | 38,347 |  |  | 34,394 |
Less: Other income from non-core acquired assets | 10 |  |  | 7 |  |  | 18 |  |  | 1,013 |  |  | (6 | ) |  | 1,048 |  |  | (6 | )
Less: Gain on sale of investment securities | — |  |  | — |  |  | — |  |  | 9 |  |  | — |  |  | 9 |  |  | 22 |
Less: Other non-core income | 26 |  |  | — |  |  | 649 |  |  | — |  |  | — |  |  | 675 |  |  | — |
Core noninterest income | 10,666 |  |  | 8,403 |  | 1 |  | 9,026 |  | 2 |  | 8,520 |  | 3 |  | 11,118 |  | 4 |  | 36,615 |  | 5 |  | 34,378 |
Total core revenue | 59,150 |  |  | 55,961 |  |  | 55,783 |  |  | 53,925 |  |  | 56,019 |  |  | 224,819 |  |  | 203,964 |
Total noninterest expense | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |  |  | 28,260 |  |  | 119,031 |  |  | 115,051 |
Less: Other expenses related to non-core acquired loans | 40 |  |  | 12 |  |  | (229 | ) |  | 14 |  |  | 114 |  |  | (163 | ) |  | 240 |
Less: Facilities disposal | — |  |  | — |  |  | 239 |  |  | — |  |  | — |  |  | 239 |  |  | 389 |
Less: Merger related expenses | 1,271 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,271 |  |  | 6,462 |
Less: Non-recurring excise tax | — |  |  | 682 |  |  | — |  |  | — |  |  | — |  |  | 682 |  |  | — |
Core noninterest expense | 29,436 |  |  | 29,228 |  |  | 29,209 |  |  | 29,129 |  |  | 28,146 |  |  | 117,002 |  |  | 107,960 |
Core efficiency ratio | 49.77 | % |  | 52.23 | % |  | 52.36 | % |  | 54.02 | % |  | 50.24 | % |  | 52.04 | % |  | 52.93 | %
NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (FULLY TAX EQUIVALENT) |  |  |  |
Net interest income | $ | 50,786 |  |  | $ | 48,299 |  |  | $ | 47,254 |  |  | $ | 46,386 |  |  | $ | 47,824 |  |  | $ | 192,725 |  |  | $ | 179,114 |
Less: Incremental accretion income | 2,109 |  |  | 535 |  |  | 291 |  |  | 766 |  |  | 2,503 |  |  | 3,701 |  |  | 7,718 |
Core net interest income | $ | 48,677 |  |  | $ | 47,764 |  |  | $ | 46,963 |  |  | $ | 45,620 |  |  | $ | 45,321 |  |  | $ | 189,024 |  |  | $ | 171,396 |
Average earning assets | $ | 5,118,319 |  |  | $ | 5,072,573 |  |  | $ | 5,023,607 |  |  | $ | 4,948,875 |  |  | $ | 4,826,271 |  |  | $ | 5,041,395 |  |  | $ | 4,611,671 |
Reported net interest margin | 3.94 | % |  | 3.78 | % |  | 3.77 | % |  | 3.80 | % |  | 3.93 | % |  | 3.82 | % |  | 3.88 | %
Core net interest margin | 3.77 |  |  | 3.74 |  |  | 3.75 |  |  | 3.74 |  |  | 3.73 |  |  | 3.75 |  |  | 3.72 |

17

| At the Quarter ended
($ in thousands) | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018 |  | Dec 31, 2017
REGULATORY CAPITAL TO RISK-WEIGHTED ASSETS
Shareholders’ equity | $ | 603,804 |  |  | $ | 586,837 |  |  | $ | 574,084 |  |  | $ | 555,015 |  |  | $ | 548,573 |
Less: Goodwill | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Less: Intangible assets, net of deferred tax liabilities | 6,440 |  |  | 6,888 |  |  | 7,355 |  |  | 7,831 |  |  | 6,661 |
Less: Unrealized gains (losses) | (9,282 | ) |  | (16,627 | ) |  | (12,580 | ) |  | (11,563 | ) |  | (3,818 | )
Plus: Other | — |  |  | — |  |  | — |  |  | — |  |  | 12 |
Common equity tier 1 capital | 489,301 |  |  | 479,231 |  |  | 461,964 |  |  | 441,402 |  |  | 428,397 |
Plus: Qualifying trust preferred securities | 67,600 |  |  | 67,600 |  |  | 67,600 |  |  | 67,600 |  |  | 67,600 |
Plus: Other | 57 |  |  | 60 |  |  | 60 |  |  | 60 |  |  | 48 |
Tier 1 capital | 556,958 |  |  | 546,891 |  |  | 529,624 |  |  | 509,062 |  |  | 496,045 |
Plus: Tier 2 capital | 93,901 |  |  | 94,611 |  |  | 94,795 |  |  | 95,075 |  |  | 93,002 |
Total risk-based capital | $ | 650,859 |  |  | $ | 641,502 |  |  | $ | 624,419 |  |  | $ | 604,137 |  |  | $ | 589,047 |
Total risk-weighted assets | $ | 4,999,363 |  |  | $ | 4,958,999 |  |  | $ | 4,956,820 |  |  | $ | 4,867,491 |  |  | $ | 4,822,695 |
Common equity tier 1 capital to risk-weighted assets | 9.79 | % |  | 9.66 | % |  | 9.32 | % |  | 9.07 | % |  | 8.88 | %
Tier 1 capital to risk-weighted assets | 11.14 |  |  | 11.03 |  |  | 10.68 |  |  | 10.46 |  |  | 10.29 |
Total risk-based capital to risk-weighted assets | 13.02 |  |  | 12.94 |  |  | 12.60 |  |  | 12.41 |  |  | 12.21 |
SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity | $ | 603,804 |  |  | $ | 586,837 |  |  | $ | 574,084 |  |  | $ | 555,015 |  |  | $ | 548,573 |
Less: Goodwill | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Less: Intangible assets | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |  |  | 11,056 |
Tangible common equity | $ | 477,906 |  |  | $ | 460,344 |  |  | $ | 446,971 |  |  | $ | 427,271 |  |  | $ | 420,172 |
Total assets | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |  |  | $ | 5,289,225 |
Less: Goodwill | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Less: Intangible assets | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |  |  | 11,056 |
Tangible assets | $ | 5,519,764 |  |  | $ | 5,391,046 |  |  | $ | 5,382,811 |  |  | $ | 5,255,358 |  |  | $ | 5,160,824 |
Tangible common equity to tangible assets | 8.66 | % |  | 8.54 | % |  | 8.30 | % |  | 8.13 | % |  | 8.14 | %

18