EX-99.1 2 ex991financialstatementsan.htm EARNINGS RELEASE
EXHIBIT 99.1
ENTERPRISE FINANCIAL REPORTS FIRST QUARTER 2019 RESULTS
First Quarter Highlights

• | Net income of $16.2 million, or $0.67 per diluted share

• | Return on average assets (“ROAA”) of 1.10%

• | Net interest margin (tax equivalent) 3.87%

• | Completed merger of Trinity Capital Corporation (“TCC”)

• | Merger related expenses of $7.3 million pretax reduced earnings per share and ROAA by $0.24 and 0.39%, respectively

St. Louis, Mo. April 22, 2019 – Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company” or “EFSC”) reported net income of $16.2 million for the quarter ended March 31, 2019, a decrease of $7.4 million, and $4.8 million as compared to the linked fourth quarter (“linked quarter”) and prior year quarter, respectively. Earnings per diluted share (“EPS”) was $0.67 for the quarter ended March 31, 2019, a decrease of 34% and 26%, compared to $1.02 and $0.90 for the linked quarter and prior year period, respectively. Net income and EPS in the current quarter declined from both the linked quarter and prior year quarter, primarily as a result of merger-related expenses of $7.3 million pretax ($5.7 million after tax), or $0.24 per diluted share. The issuance of shares related to the merger increased average diluted shares outstanding by 1,064,000 for the quarter ended March 31, 2019. The Company realized growth in its core net interest margin 1 of two basis points in the current quarter to 3.79%, as compared to 3.77% in the linked quarter and 3.74% in the prior year quarter.
ROAA, return on average common equity (“ROAE”), and return on average tangible common equity 1 (“ROATCE”) were 1.10%, 9.89%, and 12.93%, respectively in the first quarter of 2019. The impact of merger-related expenses reduced ROAA, ROAE, and ROATCE 1 by 0.39%, 3.51% and 4.60%, respectively. Excluding merger related expenses, the adjusted ROAA,1 adjusted ROAE,1 and adjusted ROATCE 1 were 1.49%, 13.40%, and 17.53%, respectively for the first quarter of 2019.
On March 8, 2019, the Company and its wholly-owned subsidiary bank, Enterprise Bank & Trust, completed the merger of TCC and TCC’s wholly-owned subsidiary, Los Alamos National Bank (“LANB”), respectively, which added $0.7 billion in loans, and $1.1 billion in deposits. The comparison of the financial results for the quarter ended March 31, 2019 to prior periods are affected by the completion of the merger. The total purchase price of the transaction was $209.2 million and consisted of 3,990,822 shares of EFSC common stock valued at $171.9 million and $37.3 million in cash. The merger further enhances the geographic diversity of the Company’s footprint by adding six full service banking offices in Los Alamos, Santa Fe, and Albuquerque, New Mexico.
The Company’s Board of Directors approved a quarterly dividend of $0.15 per common share, an increase from $0.14 for the prior quarter, payable on June 28, 2019 to shareholders of record as of June 14, 2019.
Jim Lally, EFSC’s President and Chief Executive Officer, commented, “We are pleased with our performance in the first quarter of 2019. Our financial results included continued strong credit performance, an expansion of top-line revenue and the impact of the completion of the TCC acquisition in early March. While expenses from the merger reduced earnings and our operating metrics for the quarter, we were able to start system and operations integration earlier than originally planned.”

Lally added, “We are excited to have completed the acquisition of TCC, the largest acquisition in our Company’s history. We welcome the new employees and the customers of LANB to our combined organization. LANB has a strong history of community engagement that we look forward to continuing. The power of our two franchises will help propel us as the preeminent banking choice in our markets.”
Net Interest Income
Net interest income for the first quarter increased $1.7 million to $52.3 million from $50.6 million in the linked quarter, and increased $6.2 million from the prior year period. Net interest margin on a tax equivalent basis was 3.87% for the first quarter, compared to 3.94% in the linked quarter, and 3.80% in the first quarter of 2018.
Core net interest income 1 expanded $2.7 million over the linked quarter primarily due to an increase in average earning assets in the first quarter from the merger of TCC and a higher average loan yield.
Core net interest income 1 and core net interest margin 1 exclude incremental accretion on non-core acquired loans, which were acquired from the FDIC and previously covered by loss share agreements.
See the table below for a quarterly comparison.

| For the Quarter ended
($ in thousands) | March 31, 2019 |  | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018
Net interest income | $ | 52,343 |  |  | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,048 |  |  | $ | 46,171 |
Less: Incremental accretion income | 1,157 |  |  | 2,109 |  |  | 535 |  |  | 291 |  |  | 766 |
Core net interest income 1 | $ | 51,186 |  |  | $ | 48,484 |  |  | $ | 47,558 |  |  | $ | 46,757 |  |  | $ | 45,405 |
Net interest margin (tax equivalent) | 3.87 | % |  | 3.94 | % |  | 3.78 | % |  | 3.77 | % |  | 3.80 | %
Core net interest margin,1 (tax equivalent) | 3.79 | % |  | 3.77 | % |  | 3.74 | % |  | 3.75 | % |  | 3.74 | %

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. Averages for the quarter ended March 31, 2019 only reflect the TCC acquired balances effective as of March 8, 2019, which increased average earning assets $283 million.

| For the Quarter ended
| March 31, 2019 |  | December 31, 2018 |  | March 31, 2018
($ 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* | $ | 4,511,387 |  |  | $ | 59,973 |  |  | 5.39 | % |  | $ | 4,272,132 |  |  | $ | 56,431 |  |  | 5.24 | % |  | $ | 4,138,970 |  |  | $ | 49,806 |  |  | 4.88 | %
Investments in debt and equity securities* | 896,936 |  |  | 6,292 |  |  | 2.84 |  |  | 769,461 |  |  | 5,291 |  |  | 2.73 |  |  | 740,587 |  |  | 4,567 |  |  | 2.50 |
Short-term investments | 102,166 |  |  | 447 |  |  | 1.77 |  |  | 76,726 |  |  | 364 |  |  | 1.88 |  |  | 69,318 |  |  | 240 |  |  | 1.40 |
Total earning assets | 5,510,489 |  |  | 66,712 |  |  | 4.91 |  |  | 5,118,319 |  |  | 62,086 |  |  | 4.81 |  |  | 4,948,875 |  |  | 54,613 |  |  | 4.48 |
Noninterest-earning assets | 445,597 |  |  |  |  |  |  | 400,421 |  |  |  |  |  |  | 391,237 |  |  |  |  |
Total assets | $ | 5,956,086 |  |  |  |  |  |  | $ | 5,518,740 |  |  |  |  |  |  | $ | 5,340,112 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing transaction accounts | $ | 1,077,289 |  |  | $ | 1,790 |  |  | 0.67 | % |  | $ | 864,175 |  |  | $ | 1,221 |  |  | 0.56 | % |  | $ | 862,912 |  |  | $ | 806 |  |  | 0.38 | %
Money market accounts | 1,521,878 |  |  | 6,515 |  |  | 1.74 |  |  | 1,541,832 |  |  | 6,140 |  |  | 1.58 |  |  | 1,391,055 |  |  | 3,353 |  |  | 0.98 |
Savings | 299,731 |  |  | 183 |  |  | 0.25 |  |  | 206,503 |  |  | 168 |  |  | 0.32 |  |  | 201,852 |  |  | 125 |  |  | 0.25 |
Certificates of deposit | 712,269 |  |  | 3,332 |  |  | 1.90 |  |  | 696,803 |  |  | 3,053 |  |  | 1.74 |  |  | 603,736 |  |  | 1,899 |  |  | 1.28 |
Total interest-bearing deposits | 3,611,167 |  |  | 11,820 |  |  | 1.33 |  |  | 3,309,313 |  |  | 10,582 |  |  | 1.27 |  |  | 3,059,555 |  |  | 6,183 |  |  | 0.82 |
Subordinated debentures | 124,154 |  |  | 1,648 |  |  | 5.38 |  |  | 118,146 |  |  | 1,493 |  |  | 5.01 |  |  | 118,110 |  |  | 1,368 |  |  | 4.70 |
FHLB advances | 215,420 |  |  | 1,398 |  |  | 2.63 |  |  | 178,185 |  |  | 1,121 |  |  | 2.50 |  |  | 302,548 |  |  | 1,258 |  |  | 1.69 |
Other borrowed funds | 202,197 |  |  | 408 |  |  | 0.82 |  |  | 152,422 |  |  | 213 |  |  | 0.55 |  |  | 207,442 |  |  | 184 |  |  | 0.36 |
Total interest-bearing liabilities | 4,152,938 |  |  | 15,274 |  |  | 1.49 |  |  | 3,758,066 |  |  | 13,409 |  |  | 1.42 |  |  | 3,687,655 |  |  | 8,993 |  |  | 0.99 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 1,088,323 |  |  |  |  |  |  | 1,125,321 |  |  |  |  |  |  | 1,064,771 |  |  |  |  |
Other liabilities | 52,371 |  |  |  |  |  |  | 37,489 |  |  |  |  |  |  | 33,620 |  |  |  |  |
Total liabilities | 5,293,632 |  |  |  |  |  |  | 4,920,876 |  |  |  |  |  |  | 4,786,046 |  |  |  |  |
Shareholders' equity | 662,454 |  |  |  |  |  |  | 597,864 |  |  |  |  |  |  | 554,066 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 5,956,086 |  |  |  |  |  |  | $ | 5,518,740 |  |  |  |  |  |  | $ | 5,340,112 |  |  |  |  |
Core net interest income 1 |  |  | 51,438 |  |  |  |  |  |  | 48,677 |  |  |  |  |  |  | 45,620 |  |  |
Core net interest margin 1 |  |  |  |  | 3.79 | % |  |  |  |  |  | 3.77 | % |  |  |  |  |  | 3.74 | %
Incremental accretion on non-core acquired loans |  |  | 1,157 |  |  |  |  |  |  | 2,109 |  |  |  |  |  |  | 766 |  |  |
Total net interest income |  |  | $ | 52,595 |  |  |  |  |  |  | $ | 50,786 |  |  |  |  |  |  | $ | 46,386 |  |  |
Net interest margin |  |  |  |  | 3.87 | % |  |  |  |  |  | 3.94 | % |  |  |  |  |  | 3.80 | %
* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $0.3 million for the three months ended March 31, 2019, $0.2 million for the three months ended December 31, 2018, and $0.2 million for the three months ended March 31, 2018.

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

Core net interest margin 1 increased two basis points from the linked-quarter to 3.79% during the current quarter. This increase was primarily due to the impact of interest rate increases on the Company's asset sensitive balance sheet and lower funding costs on TCC acquired deposits. Additionally, the yield on loans, excluding incremental accretion on non-core acquired loans, increased 15 basis points to 5.39% from 5.24% due to the effect of increasing interest rates on the existing variable-rate loan portfolio and higher rates on newly originated loans. The cost of interest-bearing deposits increased six basis points from the linked quarter to 1.33% for the quarter ended March 31, 2019. 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 partially offset by lower costs on TCC acquired deposits. The cost of total interest-bearing liabilities increased seven basis points to 1.49% for the quarter ended March 31, 2019 from 1.42% for the linked quarter.
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.
Loans
The following table presents total loans with selected specialized lending detail for the most recent five quarters:

| At the Quarter ended
| March 31, 2019 |  |
($ in thousands) | TCC |  | Legacy Enterprise |  | Consolidated |  | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018
C&I - general | $ | 65,122 |  |  | $ | 1,063,633 |  |  | $ | 1,128,755 |  |  | $ | 995,491 |  |  | $ | 969,898 |  |  | $ | 992,311 |  |  | $ | 948,021 |
CRE investor owned - general | 304,615 |  |  | 878,856 |  |  | 1,183,471 |  |  | 862,423 |  |  | 846,322 |  |  | 841,587 |  |  | 841,633 |
CRE owner occupied - general | 91,758 |  |  | 484,268 |  |  | 576,026 |  |  | 496,835 |  |  | 482,146 |  |  | 498,834 |  |  | 480,314 |
Enterprise value lending a | — |  |  | 439,500 |  |  | 439,500 |  |  | 465,992 |  |  | 442,439 |  |  | 442,877 |  |  | 439,352 |
Life insurance premium financing a | — |  |  | 440,693 |  |  | 440,693 |  |  | 417,950 |  |  | 378,826 |  |  | 358,787 |  |  | 365,377 |
Residential real estate - general | 137,487 |  |  | 295,069 |  |  | 432,556 |  |  | 304,671 |  |  | 314,315 |  |  | 326,790 |  |  | 337,829 |
Construction and land development - general | 70,251 |  |  | 274,956 |  |  | 345,207 |  |  | 310,832 |  |  | 312,617 |  |  | 289,206 |  |  | 297,088 |
Tax credits a | — |  |  | 235,454 |  |  | 235,454 |  |  | 262,735 |  |  | 256,666 |  |  | 260,595 |  |  | 244,088 |
Agriculture | — |  |  | 126,088 |  |  | 126,088 |  |  | 136,188 |  |  | 138,005 |  |  | 128,118 |  |  | 119,199 |
Consumer and other - general | 12,835 |  |  | 96,492 |  |  | 109,327 |  |  | 96,884 |  |  | 126,196 |  |  | 136,656 |  |  | 117,944 |
Total Loans | $ | 682,068 |  |  | $ | 4,335,009 |  |  | $ | 5,017,077 |  |  | $ | 4,350,001 |  |  | $ | 4,267,430 |  |  | $ | 4,275,761 |  |  | $ | 4,190,845 |
Total loan yield |  |  |  |  | 5.50 | % |  | 5.44 | % |  | 5.18 | % |  | 5.04 | % |  | 4.96 | %
Total C&I loans to total loans |  |  |  |  | 44 | % |  | 49 | % |  | 48 | % |  | 48 | % |  | 47 | %
Variable interest rate loans to total loans |  |  |  |  | 60 | % |  | 62 | % |  | 62 | % |  | 60 | % |  | 59 | %
Certain prior period amounts have been reclassified among the categories to conform to the current period presentation
a Specialized categories may include a mix of C&I, CRE, Construction and land development, or Consumer and other loans.

Loans totaled $5.0 billion at March 31, 2019, increasing $667 million compared to the linked quarter. On a year-over-year basis, loans increased $826 million, or 20%. The increase is primarily attributable to the acquisition of TCC along with growth in the commercial and industrial (“C&I”), commercial real estate (“CRE”), and life insurance premium finance categories, partially offset by paydowns outpacing growth in the other categories. Total legacy loans decreased $15 million at March 31, 2019 from the linked quarter and increased $144 million from the prior year quarter. We expect continued loan growth in 2019 to be a high single digit percentage, excluding acquired loans.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
4

The Company continues to focus on originating high-quality C&I relationships, as they typically have variable interest rates and allow for cross selling opportunities involving other banking products. C&I loan growth, coupled with typically fixed rate CRE lending, supports management’s efforts to maintain a flexible asset sensitive interest rate risk position.
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) | March 31, 2019 |  | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018
Nonperforming loans | $ | 9,607 |  |  | $ | 16,745 |  |  | $ | 17,044 |  |  | $ | 14,801 |  |  | $ | 15,582 |
Other real estate | 6,804 |  |  | 469 |  |  | 408 |  |  | 454 |  |  | 455 |
Nonperforming assets | $ | 16,411 |  |  | $ | 17,214 |  |  | $ | 17,452 |  |  | $ | 15,255 |  |  | $ | 16,037 |
Nonperforming loans to total loans | 0.19 | % |  | 0.38 | % |  | 0.40 | % |  | 0.35 | % |  | 0.37 | %
Nonperforming assets to total assets | 0.24 |  |  | 0.30 |  |  | 0.32 |  |  | 0.28 |  |  | 0.30 |
Allowance for loan losses to total loans | 0.86 |  |  | 1.00 |  |  | 1.04 |  |  | 1.04 |  |  | 1.07 |
Net charge-offs (recoveries) | $ | 1,825 |  |  | $ | 2,822 |  |  | $ | 2,447 |  |  | $ | 641 |  |  | $ | (226 | )

Nonperforming loans decreased $7.1 million, or 43%, to $9.6 million at March 31, 2019 from $16.7 million at December 31, 2018 primarily due to principal reductions of $5.0 million and charge-offs of $2.1 million, which were previously reserved.
Other real estate increased during the quarter ended March 31, 2019 primarily due to the addition of 15 properties with the acquisition of TCC totaling $5.0 million.
The Company recorded a net provision for loan losses of $1.5 million compared to $2.1 million for the linked quarter and $1.9 million for the prior year quarter, respectively. The provision is reflective of charge-offs in the period and maintaining a prudent credit risk posture. The decrease in the ratio of allowance for loan losses to total loans, from 1.00% in the linked quarter to 0.86% in the current quarter, is primarily due to the acquisition of TCC loans that were recorded at fair value and do not have a corresponding allowance for loan losses. The Company has recorded a preliminary credit mark on the TCC loan portfolio of $24.3 million at March 31, 2019.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
5

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

| At the Quarter ended
| March 31, 2019 |  |  |  |  |  |  |  |
($ in thousands) | TCC |  | Legacy Enterprise |  | Consolidated |  | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 30, 2018
Noninterest-bearing accounts | $ | 169,344 |  |  | $ | 1,017,164 |  |  | $ | 1,186,508 |  |  | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |
Interest-bearing transaction accounts | 401,257 |  |  | 988,569 |  |  | 1,389,826 |  |  | 1,037,684 |  |  | 743,351 |  |  | 754,819 |  |  | 875,880 |
Money market and savings accounts | 390,192 |  |  | 1,765,839 |  |  | 2,156,031 |  |  | 1,765,154 |  |  | 1,730,762 |  |  | 1,768,793 |  |  | 1,655,489 |
Brokered certificates of deposit | — |  |  | 180,788 |  |  | 180,788 |  |  | 198,981 |  |  | 202,323 |  |  | 224,192 |  |  | 201,082 |
Other certificates of deposit | 133,556 |  |  | 490,404 |  |  | 623,960 |  |  | 485,448 |  |  | 471,914 |  |  | 449,139 |  |  | 447,222 |
Total deposit portfolio | $ | 1,094,349 |  |  | $ | 4,442,764 |  |  | $ | 5,537,113 |  |  | $ | 4,587,985 |  |  | $ | 4,210,476 |  |  | $ | 4,247,912 |  |  | $ | 4,281,378 |
Noninterest-bearing deposits to total deposits | 15 | % |  | 23 | % |  | 21 | % |  | 24 | % |  | 25 | % |  | 25 | % |  | 26 | %

Total deposits at March 31, 2019 were $5.5 billion, an increase of $949 million from December 31, 2018, and an increase of $1.3 billion from March 31, 2018. Total legacy deposits decreased $145 million at March 31, 2019 from the linked quarter and increased $384 million from the prior year quarter.
Core deposits, defined as total deposits excluding certificates of deposits, were $4.7 billion at March 31, 2019, an increase of $829 million from the linked quarter, and an increase of $1.1 billion from the prior year period. The increase is primarily attributable to the acquisition of TCC, partially offset by normal seasonal reductions with some of our corporate clients.
Noninterest-bearing deposits were $1.2 billion at March 31, 2019, an increase of $86 million compared to December 31, 2018, and an increase of $85 million compared to March 31, 2018. The total cost of deposits increased seven basis points to 1.02% for the current quarter compared to 0.95% and 0.61% in the linked and prior year quarters, respectively. The cost of deposits reflects interest rate conditions for existing clients as well as rates for new customer origination. The Company benefited from the addition of TCC’s low-cost deposit portfolio, which reduced the total cost of deposits in the first quarter by six basis points.
Noninterest Income
Total noninterest income for the quarter ended March 31, 2019 was $9.2 million, a decrease of $1.5 million, or 14% from the linked quarter, and relatively stable with the prior year quarter. The decrease from the linked quarter was driven by a reduction in state tax credit activity, offset by contributions from TCC of approximately $0.6 million, primarily related to wealth management and card services revenue. The acquisition of TCC added $406 million of assets under management.
The Company expects growth in noninterest income of a high single digit percentage for 2019 over 2018 levels, exclusive of the impact of the TCC acquisition.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
6

Noninterest Expenses
Noninterest expenses were $39.8 million for the quarter ended March 31, 2019, compared to $30.7 million for the quarter ended December 31, 2018, and $29.1 million for the quarter ended March 31, 2018. The increase from the linked quarter and prior year period was primarily due to merger related expenses of $7.3 million and an increase in employee compensation and benefits, which includes seasonally higher payroll taxes of $1.1 million and TCC post-close compensation expenses of $1.2 million. The Company expects to incur additional operational and merger related expenses as systems are integrated and operations are combined.
The Company’s core efficiency ratio 1 was 54.1% for the quarter ended March 31, 2019, compared to 49.8% for the linked quarter and 54.0% for the prior year period and reflects a seasonal decline in noninterest income as well as an increase in operating expenses associated with the acquisition of TCC.
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. Additionally, conversion of LANB systems is expected to occur in the second quarter resulting in efficiency improvements in the second half of 2019.
Income Taxes
The Company’s effective tax rate was 20% for the quarter ended March 31, 2019 compared to 17% for the linked quarter, and 15% for the prior year quarter. Nondeductible merger related expenses in the current quarter increased income tax expense $0.3 million.
The Company expects its effective tax rate for the remainder of 2019 to be approximately 18% - 20%.
Capital
The following table presents various capital ratios:

| At the Quarter ended
Percent | March 31, 2019 |  | December 31, 2018 |  | September 30, 2018 |  | June 30, 2018 |  | March 31, 2018
Total risk-based capital to risk-weighted assets | 12.86 | % |  | 13.02 | % |  | 12.94 | % |  | 12.60 | % |  | 12.41 | %
Tier 1 capital to risk weighted assets | 11.25 |  |  | 11.14 |  |  | 11.03 |  |  | 10.68 |  |  | 10.46 |
Common equity tier 1 capital to risk-weighted assets | 9.64 |  |  | 9.79 |  |  | 9.66 |  |  | 9.32 |  |  | 9.07 |
Tangible common equity to tangible assets 1 | 8.35 |  |  | 8.66 |  |  | 8.54 |  |  | 8.30 |  |  | 8.13 |

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 the tangible common equity ratio 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, return on average assets, return on average equity, and the tangible common equity ratio, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a 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.
The Company considers its core net interest margin, core efficiency ratio, return on average assets, return on average equity, and return on average tangible common equity, collectively “core performance measures,” presented in this
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
7

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, which were acquired from the FDIC and previously covered by loss share agreements, and the 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 expenses directly related to non-core acquired loans. Core performance measures also exclude certain other income and expense items, such as merger related expenses, facilities charges, 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 measures 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, April 23, 2019. During the call, management will review the first quarter of 2019 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 1-800-667-5617 (Conference ID #8155182). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC1Q2019earnings 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.
About Enterprise
Enterprise Financial Services Corp (NASDAQ: EFSC), with approximately $7 billion in assets, is a bank holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly owned subsidiary of Enterprise, operates 34 branch offices in Arizona, Kansas, Missouri and New Mexico. Enterprise Bank & Trust offers a range of business and personal banking services and wealth management services. Enterprise Trust, a division of Enterprise Bank & Trust, provides financial planning, estate planning, investment management and trust services to businesses, individuals, institutions, retirement plans and non-profit organizations. Additional information is available at www.enterprisebank.com.
Enterprise Financial Services Corp’s common stock is traded on the Nasdaq Stock Market under the symbol “EFSC.” Please visit our website at www.enterprisebank.com to see our regularly posted material information.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
8

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. Such forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, shareholder value creation and the impact of the acquisition of Trinity Capital Corporation and its wholly-owned subsidiary, Los Alamos National Bank, and other acquisitions.
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,” “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 2018 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.
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.
9

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)

| For the Quarter ended
($ in thousands, except per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |
Net interest income | $ | 52,343 |  |  | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,048 |  |  | $ | 46,171 |
Provision for loan losses | 1,476 |  |  | 2,120 |  |  | 2,263 |  |  | 390 |  |  | 1,871 |
Noninterest income | 9,230 |  |  | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |
Noninterest expense | 39,838 |  |  | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |
Income before income tax expense | 20,259 |  |  | 28,428 |  |  | 24,318 |  |  | 27,132 |  |  | 24,699 |
Income tax expense | 4,103 |  |  | 4,899 |  |  | 1,802 |  |  | 4,881 |  |  | 3,778 |
Net income | $ | 16,156 |  |  | $ | 23,529 |  |  | $ | 22,516 |  |  | $ | 22,251 |  |  | $ | 20,921 |
Diluted earnings per share | $ | 0.67 |  |  | $ | 1.02 |  |  | $ | 0.97 |  |  | $ | 0.95 |  |  | $ | 0.90 |
Return on average assets | 1.10 | % |  | 1.69 | % |  | 1.63 | % |  | 1.65 | % |  | 1.59 | %
Return on average common equity | 9.89 |  |  | 15.61 |  |  | 15.22 |  |  | 15.70 |  |  | 15.31 |
Return on average tangible common equity | 12.93 |  |  | 19.79 |  |  | 19.42 |  |  | 20.23 |  |  | 19.92 |
Net interest margin (tax equivalent) | 3.87 |  |  | 3.94 |  |  | 3.78 |  |  | 3.77 |  |  | 3.80 |
Core net interest margin (tax equivalent)1 | 3.79 |  |  | 3.77 |  |  | 3.74 |  |  | 3.75 |  |  | 3.74 |
Efficiency ratio | 64.70 |  |  | 50.16 |  |  | 52.96 |  |  | 51.50 |  |  | 52.31 |
Core efficiency ratio 1 | 54.06 |  |  | 49.77 |  |  | 52.23 |  |  | 52.36 |  |  | 54.02 |
Total assets | $ | 6,932,757 |  |  | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |
Total average assets | 5,956,086 |  |  | 5,518,740 |  |  | 5,471,504 |  |  | 5,415,151 |  |  | 5,340,112 |
Total deposits | 5,537,113 |  |  | 4,587,985 |  |  | 4,210,476 |  |  | 4,247,912 |  |  | 4,281,377 |
Total average deposits | 4,699,490 |  |  | 4,434,634 |  |  | 4,255,523 |  |  | 4,230,291 |  |  | 4,124,326 |
Period end common shares outstanding | 26,878 |  |  | 22,812 |  |  | 23,092 |  |  | 23,141 |  |  | 23,111 |
Dividends per common share | $ | 0.14 |  |  | $ | 0.13 |  |  | $ | 0.12 |  |  | $ | 0.11 |  |  | $ | 0.11 |
Tangible book value per common share 1 | $ | 20.80 |  |  | $ | 20.95 |  |  | $ | 19.94 |  |  | $ | 19.32 |  |  | $ | 18.49 |
Tangible common equity to tangible assets 1 | 8.35 | % |  | 8.66 | % |  | 8.54 | % |  | 8.30 | % |  | 8.13 | %
Total risk-based capital to risk-weighted assets | 12.86 |  |  | 13.02 |  |  | 12.94 |  |  | 12.60 |  |  | 12.41 |
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

10

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

| For the Quarter ended
($ in thousands, except per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
INCOME STATEMENTS |  |  |  |  |  |  |  |  |
NET INTEREST INCOME |  |  |  |  |  |  |  |  |
Total interest income | $ | 67,617 |  |  | $ | 64,002 |  |  | $ | 60,757 |  |  | $ | 57,879 |  |  | $ | 55,164 |
Total interest expense | 15,274 |  |  | 13,409 |  |  | 12,664 |  |  | 10,831 |  |  | 8,993 |
Net interest income | 52,343 |  |  | 50,593 |  |  | 48,093 |  |  | 47,048 |  |  | 46,171 |
Provision for loan losses | 1,476 |  |  | 2,120 |  |  | 2,263 |  |  | 390 |  |  | 1,871 |
Net interest income after provision for loan losses | 50,867 |  |  | 48,473 |  |  | 45,830 |  |  | 46,658 |  |  | 44,300 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |
Deposit service charges | 2,935 |  |  | 2,894 |  |  | 2,997 |  |  | 3,007 |  |  | 2,851 |
Wealth management revenue | 1,992 |  |  | 1,974 |  |  | 2,012 |  |  | 2,141 |  |  | 2,114 |
Card services revenue | 1,790 |  |  | 1,760 |  |  | 1,760 |  |  | 1,650 |  |  | 1,516 |
Tax credit activity, net | 158 |  |  | 2,312 |  |  | 192 |  |  | 64 |  |  | 252 |
Gain on sale of other real estate | 66 |  |  | — |  |  | 13 |  |  | — |  |  | — |
Gain on sale of investment securities | — |  |  | — |  |  | — |  |  | — |  |  | 9 |
Other income | 2,289 |  |  | 1,762 |  |  | 1,436 |  |  | 2,831 |  |  | 2,800 |
Total noninterest income | 9,230 |  |  | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |
Employee compensation and benefits | 19,352 |  |  | 16,669 |  |  | 16,297 |  |  | 16,582 |  |  | 16,491 |
Occupancy | 2,637 |  |  | 2,408 |  |  | 2,394 |  |  | 2,342 |  |  | 2,406 |
Merger related expenses | 7,270 |  |  | 1,271 |  |  | — |  |  | — |  |  | — |
Other | 10,579 |  |  | 10,399 |  |  | 11,231 |  |  | 10,295 |  |  | 10,246 |
Total noninterest expense | 39,838 |  |  | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |
Income before income tax expense | 20,259 |  |  | 28,428 |  |  | 24,318 |  |  | 27,132 |  |  | 24,699 |
Income tax expense | 4,103 |  |  | 4,899 |  |  | 1,802 |  |  | 4,881 |  |  | 3,778 |
Net income | $ | 16,156 |  |  | $ | 23,529 |  |  | $ | 22,516 |  |  | $ | 22,251 |  |  | $ | 20,921 |
Basic earnings per share | $ | 0.68 |  |  | $ | 1.02 |  |  | $ | 0.97 |  |  | $ | 0.96 |  |  | $ | 0.91 |
Diluted earnings per share | 0.67 |  |  | 1.02 |  |  | 0.97 |  |  | 0.95 |  |  | 0.90 |

11

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

| At the Quarter ended
($ in thousands) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
BALANCE SHEETS |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 85,578 |  |  | $ | 91,511 |  |  | $ | 78,119 |  |  | $ | 91,851 |  |  | $ | 81,604 |
Interest-earning deposits | 139,389 |  |  | 108,226 |  |  | 81,351 |  |  | 87,586 |  |  | 63,897 |
Debt and equity investments | 1,198,413 |  |  | 813,702 |  |  | 775,344 |  |  | 756,203 |  |  | 752,114 |
Loans held for sale | 654 |  |  | 392 |  |  | 738 |  |  | 1,388 |  |  | 1,748 |
Loans | 5,017,077 |  |  | 4,350,001 |  |  | 4,267,430 |  |  | 4,275,761 |  |  | 4,190,845 |
Less: Allowance for loan losses | 43,095 |  |  | 43,476 |  |  | 44,186 |  |  | 44,370 |  |  | 44,650 |
Total loans, net | 4,973,982 |  |  | 4,306,525 |  |  | 4,223,244 |  |  | 4,231,391 |  |  | 4,146,195 |
Other real estate | 6,804 |  |  | 469 |  |  | 408 |  |  | 454 |  |  | 455 |
Fixed assets, net | 60,301 |  |  | 32,109 |  |  | 32,354 |  |  | 32,814 |  |  | 32,127 |
Tax credits, held for sale | 37,215 |  |  | 37,587 |  |  | 45,625 |  |  | 46,481 |  |  | 42,364 |
Goodwill | 207,632 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Intangible assets, net | 31,048 |  |  | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |
Other assets | 191,741 |  |  | 129,243 |  |  | 153,863 |  |  | 134,643 |  |  | 134,854 |
Total assets | $ | 6,932,757 |  |  | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |
Noninterest-bearing deposits | $ | 1,186,508 |  |  | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |
Interest-bearing deposits | 4,350,605 |  |  | 3,487,267 |  |  | 3,148,350 |  |  | 3,196,943 |  |  | 3,179,672 |
Total deposits | 5,537,113 |  |  | 4,587,985 |  |  | 4,210,476 |  |  | 4,247,912 |  |  | 4,281,377 |
Subordinated debentures | 140,668 |  |  | 118,156 |  |  | 118,144 |  |  | 118,131 |  |  | 118,118 |
Federal Home Loan Bank advances | 180,466 |  |  | 70,000 |  |  | 401,000 |  |  | 361,534 |  |  | 224,624 |
Other borrowings | 212,171 |  |  | 223,450 |  |  | 161,795 |  |  | 167,216 |  |  | 166,589 |
Other liabilities | 64,504 |  |  | 42,267 |  |  | 39,287 |  |  | 41,047 |  |  | 37,379 |
Total liabilities | 6,134,922 |  |  | 5,041,858 |  |  | 4,930,702 |  |  | 4,935,840 |  |  | 4,828,087 |
Shareholders’ equity | 797,835 |  |  | 603,804 |  |  | 586,837 |  |  | 574,084 |  |  | 555,015 |
Total liabilities and shareholders’ equity | $ | 6,932,757 |  |  | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |

12

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

| For the Quarter ended
($ in thousands) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
LOAN PORTFOLIO |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 2,227,050 |  |  | $ | 2,123,167 |  |  | $ | 2,035,852 |  |  | $ | 2,040,751 |  |  | $ | 1,984,650 |
Commercial real estate | 1,870,040 |  |  | 1,481,834 |  |  | 1,450,184 |  |  | 1,456,373 |  |  | 1,428,040 |
Construction real estate | 369,365 |  |  | 334,645 |  |  | 332,026 |  |  | 305,238 |  |  | 312,377 |
Residential real estate | 432,902 |  |  | 305,026 |  |  | 314,676 |  |  | 327,157 |  |  | 338,200 |
Consumer and other | 117,720 |  |  | 105,329 |  |  | 134,692 |  |  | 146,242 |  |  | 127,578 |
Total loans | $ | 5,017,077 |  |  | $ | 4,350,001 |  |  | $ | 4,267,430 |  |  | $ | 4,275,761 |  |  | $ | 4,190,845 |
DEPOSIT PORTFOLIO |  |  |  |  |  |  |  |  |
Noninterest-bearing accounts | $ | 1,186,508 |  |  | $ | 1,100,718 |  |  | $ | 1,062,126 |  |  | $ | 1,050,969 |  |  | $ | 1,101,705 |
Interest-bearing transaction accounts | 1,389,826 |  |  | 1,037,684 |  |  | 743,351 |  |  | 754,819 |  |  | 875,880 |
Money market and savings accounts | 2,156,031 |  |  | 1,765,154 |  |  | 1,730,762 |  |  | 1,768,793 |  |  | 1,655,488 |
Brokered certificates of deposit | 180,788 |  |  | 198,981 |  |  | 202,323 |  |  | 224,192 |  |  | 201,082 |
Other certificates of deposit | 623,960 |  |  | 485,448 |  |  | 471,914 |  |  | 449,139 |  |  | 447,222 |
Total deposit portfolio | $ | 5,537,113 |  |  | $ | 4,587,985 |  |  | $ | 4,210,476 |  |  | $ | 4,247,912 |  |  | $ | 4,281,377 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |
Total loans | $ | 4,511,387 |  |  | $ | 4,272,132 |  |  | $ | 4,252,524 |  |  | $ | 4,224,016 |  |  | $ | 4,138,970 |
Debt and equity investments | 896,936 |  |  | 769,461 |  |  | 755,129 |  |  | 743,534 |  |  | 740,587 |
Interest-earning assets | 5,510,489 |  |  | 5,118,319 |  |  | 5,072,573 |  |  | 5,023,607 |  |  | 4,948,875 |
Total assets | 5,956,086 |  |  | 5,518,740 |  |  | 5,471,504 |  |  | 5,415,151 |  |  | 5,340,112 |
Deposits | 4,699,490 |  |  | 4,434,634 |  |  | 4,255,523 |  |  | 4,230,291 |  |  | 4,124,326 |
Shareholders’ equity | 662,454 |  |  | 597,864 |  |  | 586,765 |  |  | 568,555 |  |  | 554,066 |
Tangible common equity 1 | 506,560 |  |  | 471,678 |  |  | 459,975 |  |  | 441,136 |  |  | 426,006 |
YIELDS (tax equivalent) |  |  |  |  |  |  |  |  |
Total loans | 5.50 | % |  | 5.44 | % |  | 5.18 | % |  | 5.04 | % |  | 4.96 | %
Debt and equity investments | 2.84 |  |  | 2.73 |  |  | 2.71 |  |  | 2.58 |  |  | 2.50 |
Interest-earning assets | 4.99 |  |  | 4.98 |  |  | 4.77 |  |  | 4.64 |  |  | 4.54 |
Interest-bearing deposits | 1.33 |  |  | 1.27 |  |  | 1.16 |  |  | 0.98 |  |  | 0.82 |
Total deposits | 1.02 |  |  | 0.95 |  |  | 0.86 |  |  | 0.73 |  |  | 0.61 |
Subordinated debentures | 5.38 |  |  | 5.01 |  |  | 4.98 |  |  | 4.94 |  |  | 4.70 |
Borrowed funds | 1.75 |  |  | 1.60 |  |  | 1.62 |  |  | 1.41 |  |  | 1.15 |
Cost of paying liabilities | 1.49 |  |  | 1.42 |  |  | 1.34 |  |  | 1.16 |  |  | 0.99 |
Net interest margin | 3.87 |  |  | 3.94 |  |  | 3.78 |  |  | 3.77 |  |  | 3.80 |

13

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

| For the Quarter ended
(in thousands, except % and per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
ASSET QUALITY |  |  |  |  |  |  |  |  |
Net charge-offs (recoveries) | $ | 1,825 |  |  | $ | 2,822 |  |  | $ | 2,447 |  |  | $ | 641 |  |  | $ | (226 | )
Nonperforming loans | 9,607 |  |  | 16,745 |  |  | 17,044 |  |  | 14,801 |  |  | 15,582 |
Classified assets | 79,750 |  |  | 70,126 |  |  | 73,704 |  |  | 74,001 |  |  | 77,195 |
Nonperforming loans to total loans | 0.19 | % |  | 0.38 | % |  | 0.40 | % |  | 0.35 | % |  | 0.37 | %
Nonperforming assets to total assets | 0.24 |  |  | 0.30 |  |  | 0.32 |  |  | 0.28 |  |  | 0.30 |
Allowance for loan losses to total loans | 0.86 |  |  | 1.00 |  |  | 1.04 |  |  | 1.04 |  |  | 1.07 |
Allowance for loan losses to nonperforming loans | 448.6 |  |  | 259.6 |  |  | 259.3 |  |  | 299.8 |  |  | 281.7 |
Net charge-offs (recoveries) to average loans (annualized) | 0.16 |  |  | 0.26 |  |  | 0.23 |  |  | 0.06 |  |  | (0.02 | )
WEALTH MANAGEMENT |  |  |  |  |  |  |  |  |
Trust assets under management | $ | 1,587,627 |  |  | $ | 1,119,329 |  |  | $ | 1,174,798 |  |  | $ | 1,337,030 |  |  | $ | 1,319,259 |
Trust assets under administration | 2,405,673 |  |  | 1,811,512 |  |  | 1,984,859 |  |  | 2,165,870 |  |  | 2,151,697 |
MARKET DATA |  |  |  |  |  |  |  |  |
Book value per common share | $ | 29.68 |  |  | $ | 26.47 |  |  | $ | 25.41 |  |  | $ | 24.81 |  |  | $ | 24.02 |
Tangible book value per common share 1 | 20.80 |  |  | 20.95 |  |  | 19.94 |  |  | 19.32 |  |  | 18.49 |
Market value per share | 40.77 |  |  | 37.63 |  |  | 53.05 |  |  | 53.95 |  |  | 46.90 |
Period end common shares outstanding | 26,878 |  |  | 22,812 |  |  | 23,092 |  |  | 23,141 |  |  | 23,111 |
Average basic common shares | 23,927 |  |  | 23,014 |  |  | 23,148 |  |  | 23,124 |  |  | 23,115 |
Average diluted common shares | 24,083 |  |  | 23,170 |  |  | 23,329 |  |  | 23,318 |  |  | 23,287 |
CAPITAL |  |  |  |  |  |  |  |  |
Total risk-based capital to risk-weighted assets | 12.86 | % |  | 13.02 | % |  | 12.94 | % |  | 12.60 | % |  | 12.41 | %
Tier 1 capital to risk-weighted assets | 11.25 |  |  | 11.14 |  |  | 11.03 |  |  | 10.68 |  |  | 10.46 |
Common equity tier 1 capital to risk-weighted assets | 9.64 |  |  | 9.79 |  |  | 9.66 |  |  | 9.32 |  |  | 9.07 |
Tangible common equity to tangible assets 1 | 8.35 |  |  | 8.66 |  |  | 8.54 |  |  | 8.30 |  |  | 8.13 |
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

14

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

| For the Quarter ended
($ in thousands, except per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Sep 30, 2018 |  | Jun 30, 2018 |  | Mar 31, 2018
CORE PERFORMANCE MEASURES
Net interest income | $ | 52,343 |  |  | $ | 50,593 |  |  | $ | 48,093 |  |  | $ | 47,048 |  |  | $ | 46,171 |
Less: Incremental accretion income | 1,157 |  |  | 2,109 |  |  | 535 |  |  | 291 |  |  | 766 |
Core net interest income | 51,186 |  |  | 48,484 |  |  | 47,558 |  |  | 46,757 |  |  | 45,405 |
Total noninterest income | 9,230 |  |  | 10,702 |  |  | 8,410 |  |  | 9,693 |  |  | 9,542 |
Less: Other income from non-core acquired assets | 365 |  |  | 10 |  |  | 7 |  |  | 18 |  |  | 1,013 |
Less: Gain on sale of investment securities | — |  |  | — |  |  | — |  |  | — |  |  | 9 |
Less: Other non-core income | — |  |  | 26 |  |  | — |  |  | 649 |  |  | — |
Core noninterest income | 8,865 |  |  | 10,666 |  |  | 8,403 |  |  | 9,026 |  |  | 8,520 |
Total core revenue | 60,051 |  |  | 59,150 |  |  | 55,961 |  |  | 55,783 |  |  | 53,925 |
Total noninterest expense | 39,838 |  |  | 30,747 |  |  | 29,922 |  |  | 29,219 |  |  | 29,143 |
Less: Other expenses related to non-core acquired loans | 103 |  |  | 40 |  |  | 12 |  |  | (229 | ) |  | 14 |
Less: Facilities disposal | — |  |  | — |  |  | — |  |  | 239 |  |  | — |
Less: Merger related expenses | 7,270 |  |  | 1,271 |  |  | — |  |  | — |  |  | — |
Less: Non-recurring excise tax | — |  |  | — |  |  | 682 |  |  | — |  |  | — |
Core noninterest expense | 32,465 |  |  | 29,436 |  |  | 29,228 |  |  | 29,209 |  |  | 29,129 |
Core efficiency ratio | 54.06 | % |  | 49.77 | % |  | 52.23 | % |  | 52.36 | % |  | 54.02 | %
NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (TAX EQUIVALENT)
Net interest income | $ | 52,595 |  |  | $ | 50,786 |  |  | $ | 48,299 |  |  | $ | 47,254 |  |  | $ | 46,386 |
Less: Incremental accretion income | 1,157 |  |  | 2,109 |  |  | 535 |  |  | 291 |  |  | 766 |
Core net interest income | $ | 51,438 |  |  | $ | 48,677 |  |  | $ | 47,764 |  |  | $ | 46,963 |  |  | $ | 45,620 |
Average earning assets | $ | 5,510,489 |  |  | $ | 5,118,319 |  |  | $ | 5,072,573 |  |  | $ | 5,023,607 |  |  | $ | 4,948,875 |
Reported net interest margin | 3.87 | % |  | 3.94 | % |  | 3.78 | % |  | 3.77 | % |  | 3.80 | %
Core net interest margin | 3.79 |  |  | 3.77 |  |  | 3.74 |  |  | 3.75 |  |  | 3.74 |

SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity | $ | 797,835 |  |  | $ | 603,804 |  |  | $ | 586,837 |  |  | $ | 574,084 |  |  | $ | 555,015 |
Less: Goodwill | 207,632 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Less: Intangible assets | 31,048 |  |  | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |
Tangible common equity | $ | 559,155 |  |  | $ | 477,906 |  |  | $ | 460,344 |  |  | $ | 446,971 |  |  | $ | 427,271 |
Total assets | $ | 6,932,757 |  |  | $ | 5,645,662 |  |  | $ | 5,517,539 |  |  | $ | 5,509,924 |  |  | $ | 5,383,102 |
Less: Goodwill | 207,632 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |  |  | 117,345 |
Less: Intangible assets | 31,048 |  |  | 8,553 |  |  | 9,148 |  |  | 9,768 |  |  | 10,399 |
Tangible assets | $ | 6,694,077 |  |  | $ | 5,519,764 |  |  | $ | 5,391,046 |  |  | $ | 5,382,811 |  |  | $ | 5,255,358 |
Tangible common equity to tangible assets | 8.35 | % |  | 8.66 | % |  | 8.54 | % |  | 8.30 | % |  | 8.13 | %

15

| For the Quarter ended
($ in thousands, except per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Mar 31, 2018
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity | $ | 662,454 |  |  | $ | 597,864 |  |  | $ | 554,066 |
Less average goodwill | 141,422 |  |  | 117,345 |  |  | 117,345 |
Less average intangible assets | 14,472 |  |  | 8,841 |  |  | 10,715 |
Average tangible common equity | 506,560 |  |  | 471,678 |  |  | 426,006 |

| For the Quarter ended
($ in thousands, except per share data) | Mar 31, 2019 |  | Dec 31, 2018 |  | Mar 31, 2018
IMPACT OF MERGER-RELATED EXPENSES |  |  |  |  |
Net income - GAAP | $ | 16,156 |  |  | $ | 23,529 |  |  | $ | 20,921 |
Merger related expenses | 7,270 |  |  | 1,271 |  |  | — |
Related tax effect | (1,535 | ) |  | (314 | ) |  | — |
Adjusted net income - Non-GAAP | $ | 21,891 |  |  | $ | 24.486 |  |  | $ | 20.921 |
Average assets | $ | 5,956,086 |  |  | $ | 5,518,740 |  |  | $ | 5,340,112 |
ROAA - GAAP net income | 1.10 | % |  | 1.69 | % |  | 1.59 | %
ROAA - Adjusted net income | 1.49 |  |  | 1.76 |  |  | 1.59 |
Average shareholder’s equity | $ | 662,454 |  |  | $ | 597,864 |  |  | $ | 554,066 |
ROAE - GAAP net income | 9.89 | % |  | 15.61 | % |  | 15.31 | %
ROAE - Adjusted net income | 13.40 |  |  | 16.25 |  |  | 15.31 |
Average tangible common equity | $ | 506,560 |  |  | $ | 471,678 |  |  | $ | 426,006 |
ROATCE - GAAP net income | 12.93 | % |  | 19.79 | % |  | 19.92 | %
ROATCE - Adjusted net income | 17.53 |  |  | 20.60 |  |  | 19.92 |

16