EX-99.1 2 ex991financialstatemen.htm EARNINGS RELEASE
EXHIBIT 99.1
ENTERPRISE FINANCIAL REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS
2019 Highlights

• | Net income of $92.7 million, or $3.55 per diluted share

• | Return on average assets of 1.35%

• | Acquisition and integration of Trinity Capital Corporation (“Trinity”)

• | Repurchase of 396,737 shares at an average price of $39.13 per share

Fourth Quarter Highlights

• | Net income of $29.1 million, or $1.09 per diluted share

• | Return on average assets of 1.58%

• | Loans increased $86.3 million, or 7% annualized

• | Deposits increased $146.6 million, or 10% annualized

St. Louis, Mo. January 20, 2020. Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”) reported net income of $92.7 million, or $3.55 per diluted share, for the year ended December 31, 2019, compared to $89.2 million, or $3.83 per diluted share for the prior year period. Merger-related expenses from the Trinity acquisition reduced net income by $18.0 million pretax ($14.0 million after tax), or $0.53 per diluted share.
The Company recorded net income of $29.1 million for both the third and fourth quarters of 2019, or earnings per share of $1.08 and $1.09, respectively. Seasonally strong sales of tax credits in the fourth quarter offset the decline in incremental accretion income from the linked third quarter (“linked quarter”).
Dividends paid in 2019 of $0.62 per share increased $0.15 per share, or 32%, compared to $0.47 per share in 2018. The Company’s Board of Directors approved the Company’s quarterly dividend of $0.18 per common share for the first quarter of 2020, an increase from $0.17 for the prior quarter, payable on March 31, 2020 to shareholders of record as of March 16, 2020.
Jim Lally, EFSC’s President and Chief Executive Officer, commented, “We are pleased with another solid quarter of financial performance to close 2019. We achieved strong growth in both loans and deposits during the fourth quarter. On an annualized basis, loans grew 7% and deposits grew 10%. Given the current interest rate environment, I am pleased that our business fundamentals continued to generate robust earnings with a 1.6% return on average assets and a 19% return on average tangible common equity 1.”
Lally added, “2019 was a pivotal year, as we expanded our geographic presence into New Mexico with the acquisition and integration of Trinity, organically grew the balance sheet with quality loan and deposit relationships and strategically managed our capital position to provide a high return to our shareholders. Our continued success reflects the resolve of our associates to serve the customers and communities within our market areas.”
The Company closed its acquisition of Trinity on March 8, 2019. The results of operations of Trinity are included in our consolidated results from this date forward and are excluded from preceding periods.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

Net Interest Income
For 2019, net interest income totaled $238.7 million, an increase of $46.8 million, or 24%, compared to $191.9 million in the prior year. Net interest margin, on a fully tax equivalent basis, was 3.80% for 2019 compared to 3.82% for the prior year. The increase in net interest income was primarily due to the Trinity acquisition and organic growth.
Net interest income for the fourth quarter of 2019 totaled $61.6 million, a decrease of $1.4 million, from the linked quarter. Interest rates continued to decline during the fourth quarter. Portfolio loan growth, combined with the Company’s ability to modestly reprice deposits, helped to deliver a consistent level of core net interest income 1 of $61.0 million for both the third and fourth quarter. The impact of lower interest rates on loan yields was offset by an increase in average loans, a decrease in the cost of interest-bearing liabilities and growth in noninterest-bearing deposits that resulted in a reduction in wholesale borrowings.
Core net interest income and core net interest margin noted in the table below exclude incremental accretion on non-core acquired loans.

| Quarter ended |  | Year ended
($ in thousands) | December 31, 2019 |  | September 30, 2019 |  | December 31, 2018 |  | December 31, 2019 |  | December 31, 2018
Net interest income | $ | 61,613 |  |  | $ | 63,046 |  |  | $ | 50,593 |  |  | $ | 238,717 |  |  | $ | 191,905 |
Less: Incremental accretion income 2 | 576 |  |  | 2,140 |  |  | 2,109 |  |  | 4,783 |  |  | 3,701 |
Core net interest income 3 | $ | 61,037 |  |  | $ | 60,906 |  |  | $ | 48,484 |  |  | $ | 233,934 |  |  | $ | 188,204 |
Net interest margin (fully tax equivalent) | 3.68 | % |  | 3.81 | % |  | 3.94 | % |  | 3.80 | % |  | 3.82 | %
Core net interest margin 3 (fully tax equivalent) | 3.64 | % |  | 3.69 | % |  | 3.77 | % |  | 3.73 | % |  | 3.75 | %

2 Represents incremental accretion income on non-core acquired loans which were acquired from the FDIC and previously covered by shared-loss agreements.
3 Core net interest income and core net interest margin are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
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.

| Quarter ended
| December 31, 2019 |  | September 30, 2019 |  | December 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* | $ | 5,279,500 |  |  | $ | 67,085 |  |  | 5.04 | % |  | $ | 5,178,009 |  |  | $ | 69,193 |  |  | 5.30 | % |  | $ | 4,272,132 |  |  | $ | 56,431 |  |  | 5.24 | %
Investments in debt and equity securities* | 1,322,017 |  |  | 9,699 |  |  | 2.91 |  |  | 1,312,860 |  |  | 9,610 |  |  | 2.90 |  |  | 769,461 |  |  | 5,291 |  |  | 2.73 |
Short-term investments | 102,989 |  |  | 406 |  |  | 1.56 |  |  | 113,214 |  |  | 572 |  |  | 2.00 |  |  | 76,726 |  |  | 364 |  |  | 1.88 |
Total earning assets | 6,704,506 |  |  | 77,190 |  |  | 4.57 |  |  | 6,604,083 |  |  | 79,375 |  |  | 4.77 |  |  | 5,118,319 |  |  | 62,086 |  |  | 4.81 |
Noninterest-earning assets | 617,990 |  |  |  |  |  |  | 618,274 |  |  |  |  |  |  | 400,421 |  |  |  |  |
Total assets | $ | 7,322,496 |  |  |  |  |  |  | $ | 7,222,357 |  |  |  |  |  |  | $ | 5,518,740 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing transaction accounts | $ | 1,325,363 |  |  | $ | 1,620 |  |  | 0.48 | % |  | $ | 1,356,328 |  |  | $ | 2,048 |  |  | 0.60 | % |  | $ | 864,175 |  |  | $ | 1,221 |  |  | 0.56 | %
Money market accounts | 1,693,357 |  |  | 5,797 |  |  | 1.36 |  |  | 1,639,603 |  |  | 6,959 |  |  | 1.68 |  |  | 1,541,832 |  |  | 6,140 |  |  | 1.58 |
Savings | 543,571 |  |  | 195 |  |  | 0.14 |  |  | 548,109 |  |  | 232 |  |  | 0.17 |  |  | 206,503 |  |  | 168 |  |  | 0.32 |
Certificates of deposit | 846,253 |  |  | 4,096 |  |  | 1.92 |  |  | 820,943 |  |  | 3,970 |  |  | 1.92 |  |  | 696,803 |  |  | 3,053 |  |  | 1.74 |
Total interest-bearing deposits | 4,408,544 |  |  | 11,708 |  |  | 1.05 |  |  | 4,364,983 |  |  | 13,209 |  |  | 1.20 |  |  | 3,309,313 |  |  | 10,582 |  |  | 1.27 |
Subordinated debentures | 141,217 |  |  | 1,945 |  |  | 5.46 |  |  | 141,136 |  |  | 1,956 |  |  | 5.50 |  |  | 118,146 |  |  | 1,493 |  |  | 5.01 |
FHLB advances | 291,057 |  |  | 1,371 |  |  | 1.87 |  |  | 378,207 |  |  | 2,203 |  |  | 2.31 |  |  | 178,185 |  |  | 1,121 |  |  | 2.50 |
Securities sold under agreements to repurchase | 170,481 |  |  | 308 |  |  | 0.72 |  |  | 155,238 |  |  | 327 |  |  | 0.84 |  |  | 151,031 |  |  | 205 |  |  | 0.54 |
Other borrowings | 36,220 |  |  | 293 |  |  | 3.21 |  |  | 37,817 |  |  | 337 |  |  | 3.54 |  |  | 1,391 |  |  | 8 |  |  | 2.28 |
Total interest-bearing liabilities | 5,047,519 |  |  | 15,625 |  |  | 1.23 |  |  | 5,077,381 |  |  | 18,032 |  |  | 1.41 |  |  | 3,758,066 |  |  | 13,409 |  |  | 1.42 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 1,347,748 |  |  |  |  |  |  | 1,232,360 |  |  |  |  |  |  | 1,125,321 |  |  |  |  |
Other liabilities | 67,555 |  |  |  |  |  |  | 68,642 |  |  |  |  |  |  | 37,489 |  |  |  |  |
Total liabilities | 6,462,822 |  |  |  |  |  |  | 6,378,383 |  |  |  |  |  |  | 4,920,876 |  |  |  |  |
Shareholders' equity | 859,674 |  |  |  |  |  |  | 843,974 |  |  |  |  |  |  | 597,864 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 7,322,496 |  |  |  |  |  |  | $ | 7,222,357 |  |  |  |  |  |  | $ | 5,518,740 |  |  |  |  |
Core net interest income 1 |  |  | 61,565 |  |  |  |  |  |  | 61,343 |  |  |  |  |  |  | 48,677 |  |  |
Core net interest margin 1 |  |  |  |  | 3.64 | % |  |  |  |  |  | 3.69 | % |  |  |  |  |  | 3.77 | %
Incremental accretion on non-core acquired loans |  |  | 576 |  |  |  |  |  |  | 2,140 |  |  |  |  |  |  | 2,109 |  |  |
Total net interest income |  |  | $ | 62,141 |  |  |  |  |  |  | $ | 63,483 |  |  |  |  |  |  | $ | 50,786 |  |  |
Net interest margin |  |  |  |  | 3.68 | % |  |  |  |  |  | 3.81 | % |  |  |  |  |  | 3.94 | %
* Non-taxable income is presented on a fully tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $0.5 million for the three months ended December 31, 2019, $0.4 million for the three months ended September 30, 2019, and $0.2 million for the three months ended December 31, 2018.

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

The core net interest margin 1 decreased five basis points to 3.64% during the fourth quarter 2019 primarily due to a 26-basis point decrease in loan yields. This is a result of the decline of both the one-month LIBOR and Prime interest rates during the fourth quarter, which impacted the underlying interest rates of the Company’s loan portfolio, 59% of which is priced to variable interest rate indices. In response, the Company was successful in lowering the cost of interest-bearing transaction accounts and money market accounts by 12 basis points and 32 basis points, respectively, in the fourth quarter to partially offset the decrease in margin from the lower loan yield. Additionally, seasonal growth in noninterest-bearing deposits in the fourth quarter reduced the use of higher-cost wholesale borrowings.
The Company manages its balance sheet in part to defend against pressures on core net interest margin, which could be negatively impacted by continued competition for deposits, current interest rate conditions, and downward movement in short-term rates.
Loans
The following table presents total loans for the most recent five quarters.

| Quarter ended
|  |  |  |  |  |  | March 31, 2019 |  |
($ in thousands) | Dec 31, 2019 |  | Sept 30, 2019 |  | June 30, 2019 |  | Trinity b |  | Legacy EFSC b |  | Consolidated |  | Dec 31, 2018
C&I - general | $ | 1,186,667 |  |  | $ | 1,174,569 |  |  | $ | 1,103,908 |  |  | $ | 65,122 |  |  | $ | 1,063,633 |  |  | $ | 1,128,755 |  |  | $ | 995,491 |
CRE investor owned - general | 1,290,258 |  |  | 1,281,332 |  |  | 1,235,596 |  |  | 304,615 |  |  | 878,856 |  |  | 1,183,471 |  |  | 862,423 |
CRE owner occupied - general | 582,579 |  |  | 566,219 |  |  | 591,401 |  |  | 91,758 |  |  | 484,268 |  |  | 576,026 |  |  | 496,835 |
Enterprise value lending a | 428,896 |  |  | 417,521 |  |  | 445,981 |  |  | — |  |  | 439,500 |  |  | 439,500 |  |  | 465,992 |
Life insurance premium financing a | 472,822 |  |  | 468,051 |  |  | 465,777 |  |  | — |  |  | 440,693 |  |  | 440,693 |  |  | 417,950 |
Residential real estate - general | 366,261 |  |  | 386,174 |  |  | 409,200 |  |  | 137,487 |  |  | 295,069 |  |  | 432,556 |  |  | 304,671 |
Construction and land development - general | 428,681 |  |  | 403,590 |  |  | 376,597 |  |  | 70,251 |  |  | 274,956 |  |  | 345,207 |  |  | 310,832 |
Tax credits a | 294,210 |  |  | 265,626 |  |  | 268,405 |  |  | — |  |  | 235,454 |  |  | 235,454 |  |  | 262,735 |
Agriculture | 139,873 |  |  | 136,249 |  |  | 131,671 |  |  | — |  |  | 126,088 |  |  | 126,088 |  |  | 136,188 |
Consumer and other - general | 124,090 |  |  | 128,683 |  |  | 120,961 |  |  | 12,835 |  |  | 96,492 |  |  | 109,327 |  |  | 96,884 |
Total Loans | $ | 5,314,337 |  |  | $ | 5,228,014 |  |  | $ | 5,149,497 |  |  | $ | 682,068 |  |  | $ | 4,335,009 |  |  | $ | 5,017,077 |  |  | $ | 4,350,001 |
Total loan yield | 5.08 | % |  | 5.47 | % |  | 5.49 | % |  |  |  |  |  | 5.50 | % |  | 5.44 | %
Total C&I loans to total loans | 44 | % |  | 44 | % |  | 44 | % |  |  |  |  |  | 44 | % |  | 49 | %
Variable interest rate loans to total loans | 59 | % |  | 60 | % |  | 60 | % |  |  |  |  |  | 60 | % |  | 62 | %
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.
b Amounts reported are as of March 31, 2019 and are separately shown attributable to the Trinity loan portfolio and related operations acquired on March 8, 2019, and the Company’s pre-Trinity acquisition loan portfolio and related operations.

Loans totaled $5.3 billion at December 31, 2019, increasing $86.3 million, or 7% annualized, compared to the linked quarter. In 2019, loans increased $964.3 million primarily due to the Trinity acquisition and organic growth, or 7% excluding loans attributed to New Mexico. We expect loan growth in 2020 to be 6-8%.
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 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.

| Quarter ended
($ in thousands) | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |  | December 31, 2018
Nonperforming loans | $ | 26,425 |  |  | $ | 15,569 |  |  | $ | 19,842 |  |  | $ | 9,607 |  |  | $ | 16,745 |
Other real estate | 6,344 |  |  | 8,498 |  |  | 10,531 |  |  | 6,804 |  |  | 469 |
Nonperforming assets | $ | 32,769 |  |  | $ | 24,067 |  |  | $ | 30,373 |  |  | $ | 16,411 |  |  | $ | 17,214 |
Nonperforming loans to total loans | 0.50 | % |  | 0.30 | % |  | 0.39 | % |  | 0.19 | % |  | 0.38 | %
Nonperforming assets to total assets | 0.45 |  |  | 0.33 |  |  | 0.42 |  |  | 0.24 |  |  | 0.30 |
Allowance for loan losses to total loans | 0.81 |  |  | 0.85 |  |  | 0.85 |  |  | 0.86 |  |  | 1.00 |
Net charge-offs | $ | 2,544 |  |  | $ | 1,070 |  |  | $ | 970 |  |  | $ | 1,826 |  |  | $ | 2,822 |

Nonperforming assets increased $8.7 million to $32.8 million at December 31, 2019 from $24.1 million at September 30, 2019. The increase was primarily from the addition of a $12.9 million nonaccrual loan, partially offset by a $2.2 million decrease in other nonaccrual loans and a $2.2 million decrease in other real estate. The addition of the $12.9 million nonaccrual loan did not significantly impact the provision for loan losses, as the reserve coverage on the loan had been primarily recorded in prior periods.
The Company recorded a provision for loan losses of $6.4 million in 2019, compared to $6.6 million in the prior year. In the fourth quarter 2019, the provision for loan losses was $1.3 million compared to $1.8 million in the linked quarter. Net charge-offs to average loans totaled 0.13% for both 2019 and 2018. The decrease in the ratio of allowance for loan losses to total loans to 0.81% at December 31, 2019, from 0.85% at September 30, 2019, was due to a 24% decrease in substandard loans and net charge-offs of $2.5 million.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
5

Deposits
The following table presents total deposits for the most recent five quarters.

|  |  |  |  | Quarter ended
|  |  |  |  |  |  | March 31, 2019 |  |
($ in thousands) | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | Trinity a |  | Legacy EFSC a |  | Consolidated |  | December 31, 2018
Noninterest-bearing accounts | $ | 1,327,348 |  |  | $ | 1,295,450 |  |  | $ | 1,181,577 |  |  | $ | 169,344 |  |  | $ | 1,017,164 |  |  | $ | 1,186,508 |  |  | $ | 1,100,718 |
Interest-bearing transaction accounts | 1,367,444 |  |  | 1,307,855 |  |  | 1,392,586 |  |  | 401,257 |  |  | 988,569 |  |  | 1,389,826 |  |  | 1,037,684 |
Money market and savings accounts | 2,249,784 |  |  | 2,201,052 |  |  | 2,162,605 |  |  | 390,192 |  |  | 1,765,839 |  |  | 2,156,031 |  |  | 1,765,154 |
Brokered certificates of deposit | 215,758 |  |  | 209,754 |  |  | 213,138 |  |  | — |  |  | 180,788 |  |  | 180,788 |  |  | 198,981 |
Other certificates of deposit | 610,689 |  |  | 610,269 |  |  | 609,432 |  |  | 133,556 |  |  | 490,404 |  |  | 623,960 |  |  | 485,448 |
Total deposit portfolio | $ | 5,771,023 |  |  | $ | 5,624,380 |  |  | $ | 5,559,338 |  |  | $ | 1,094,349 |  |  | $ | 4,442,764 |  |  | $ | 5,537,113 |  |  | $ | 4,587,985 |
Noninterest-bearing deposits to total deposits | 23.0 | % |  | 23.0 | % |  | 21.3 | % |  | 15.5 | % |  | 22.9 | % |  | 21.4 | % |  | 24.0 | %
a Amounts reported are as of March 31, 2019 and are shown separately attributable to the Trinity deposit portfolio and related operations acquired on March 8, 2019, and the Company’s pre-Trinity acquisition deposit portfolio and related operations.

Total deposits at December 31, 2019 were $5.8 billion, an increase of $146.6 million from September 30, 2019, and an increase of $1.2 billion, or 26%, from December 31, 2018. The increase over the prior year period was primarily due to the Trinity acquisition.
Core deposits, defined as total deposits excluding time deposits, were $4.9 billion at December 31, 2019, an increase of $140.2 million, or 12% on an annualized basis, from the linked quarter, and an increase of $1.0 billion, or 27%, from the prior year period.
Noninterest-bearing deposits increased $31.9 million compared to September 30, 2019, and increased $226.6 million compared to December 31, 2018. The total cost of deposits was 0.81% for the fourth quarter, reflecting the deposit repricing discussed previously, compared to 0.94% in the linked quarter and 0.95% in the prior year quarter.
Noninterest Income
Total noninterest income for 2019 was $49.2 million, an increase of $10.8 million, or 28%, from 2018. This improvement was primarily due to the following:
For the full year:

◦ | Deposit service charges increased $1.1 million or 9%

◦ | Wealth management revenue increased $1.7 million or 21%

◦ | Income from card services increased $2.5 million or 37%

◦ | Tax credit income increased $2.6 million or 91%

◦ | Other income increased $2.7 million, or 31%, due to swap fees, sublease income, and BOLI income

The bullet points above are inclusive of $7.9 million attributed to the acquisition of Trinity.
For the quarter ended December 31, 2019, total noninterest income was $14.4 million, an increase of $0.9 million, or 6%, from the linked quarter. Noninterest income in the linked quarter included $1.3 million of gains on investment sales and loan workout income that did not reoccur in the fourth quarter. Tax credit income was seasonally strong at $3.4 million for the fourth quarter 2019, compared to $1.2 million in the linked third quarter, due primarily to state tax credit sales.
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
6

Noninterest Expenses
Noninterest expense for 2019 was $165.5 million, an increase of $46.5 million, or 39%, from 2018. The acquisition of Trinity contributed $24.5 million of the current year increase. In addition, merger-related expenses were $18.0 million in 2019. The Company’s efficiency ratio was 57.5% in 2019, compared to 51.7% for the prior year. The increase in 2019 was primarily due to merger-related expenses incurred for the Trinity acquisition. The Company’s core efficiency ratio 1 was 52.4% in 2019, compared to 52.0% for the prior year.
For the fourth quarter 2019, noninterest expense was $38.4 million, an increase of $0.1 million from the linked quarter. Included in the fourth quarter were other real estate owned valuation adjustments of $0.8 million that were partially offset by a decrease in other expenses. The fourth quarter efficiency ratio was 50.4% compared to 50.0% in the linked quarter. The Company’s core efficiency ratio 1 was 50.7% for the fourth quarter compared to 51.7% for the linked quarter. The decrease in the core efficiency ratio from the linked quarter is reflective of higher operating revenue, including seasonal tax credit income, and holding noninterest expense steady.
Income Taxes
The Company’s effective tax rate was 20.1% in 2019 compared to 14.7% for the prior year. The lower rate for the prior year resulted from a non-recurring reduction of income tax expense of $2.7 million from a tax planning election.
The effective tax rate was 19.9% for the fourth quarter of 2019, compared to 20.4% for the linked quarter. The Company expects its effective tax rate for 2020 to be approximately 20-21%.
Capital
The following table presents various EFSC capital ratios:

| Quarter ended
Percent | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |  | December 31, 2018
Total risk-based capital to risk-weighted assets | 12.89 | % |  | 12.72 | % |  | 12.62 | % |  | 12.86 | % |  | 13.02 | %
Tier 1 capital to risk weighted assets | 11.38 |  |  | 11.17 |  |  | 11.06 |  |  | 11.25 |  |  | 11.14 |
Common equity tier 1 capital to risk-weighted assets | 9.88 |  |  | 9.64 |  |  | 9.51 |  |  | 9.64 |  |  | 9.79 |
Tangible common equity to tangible assets 1 | 8.89 |  |  | 8.54 |  |  | 8.43 |  |  | 8.35 |  |  | 8.66 |

Capital ratios for the current quarter are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.
Use of Non-GAAP Financial Measures
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 adjusted EPS, core net interest income, core net interest margin, tangible common equity, core efficiency ratios, ROATCE, adjusted ROAA, adjusted ROAE, and adjusted ROATCE, 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 adjusted EPS, core net interest income, core net interest margin, core efficiency ratio, adjusted ROAA, adjusted ROAE, ROATCE, adjusted ROATCE, and the tangible common equity ratio, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
7

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, January 21, 2020. During the call, management will review the fourth quarter and full year 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 1-800-367-2403 (Conference ID #9295717). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC4Q2019earnings 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 financial holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly-owned subsidiary of EFSC, 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.
Forward-looking Statements
Readers should note that, in addition to the historical information contained herein, this press release may contain “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 may include projections 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
1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
8

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 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, including the Trinity acquisition, 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 policies and practices or accounting standards, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss (“CECL”) model, which will change how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption on January 1, 2020, uncertainty regarding the future of LIBOR, 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)

| Quarter ended |  | Year ended
($ in thousands, except per share data) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018 |  | Dec 31, 2019 |  | Dec 31, 2018
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 61,613 |  |  | $ | 63,046 |  |  | $ | 61,715 |  |  | $ | 52,343 |  |  | $ | 50,593 |  |  | $ | 238,717 |  |  | $ | 191,905 |
Provision for loan losses | 1,341 |  |  | 1,833 |  |  | 1,722 |  |  | 1,476 |  |  | 2,120 |  |  | 6,372 |  |  | 6,644 |
Noninterest income | 14,418 |  |  | 13,564 |  |  | 11,964 |  |  | 9,230 |  |  | 10,702 |  |  | 49,176 |  |  | 38,347 |
Noninterest expense | 38,354 |  |  | 38,239 |  |  | 49,054 |  |  | 39,838 |  |  | 30,747 |  |  | 165,485 |  |  | 119,031 |
Income before income tax expense | 36,336 |  |  | 36,538 |  |  | 22,903 |  |  | 20,259 |  |  | 28,428 |  |  | 116,036 |  |  | 104,577 |
Income tax expense | 7,246 |  |  | 7,469 |  |  | 4,479 |  |  | 4,103 |  |  | 4,899 |  |  | 23,297 |  |  | 15,360 |
Net income | $ | 29,090 |  |  | $ | 29,069 |  |  | $ | 18,424 |  |  | $ | 16,156 |  |  | $ | 23,529 |  |  | $ | 92,739 |  |  | $ | 89,217 |
Diluted earnings per share | $ | 1.09 |  |  | $ | 1.08 |  |  | $ | 0.68 |  |  | $ | 0.67 |  |  | $ | 1.02 |  |  | $ | 3.55 |  |  | $ | 3.83 |
Return on average assets | 1.58 | % |  | 1.60 | % |  | 1.05 | % |  | 1.10 | % |  | 1.69 | % |  | 1.35 | % |  | 1.64 | %
Return on average common equity | 13.43 |  |  | 13.66 |  |  | 9.09 |  |  | 9.89 |  |  | 15.61 |  |  | 11.66 |  |  | 15.46 |
Return on average tangible common equity | 18.54 |  |  | 19.08 |  |  | 12.92 |  |  | 12.93 |  |  | 19.79 |  |  | 16.08 |  |  | 19.83 |
Net interest margin (fully tax equivalent) | 3.68 |  |  | 3.81 |  |  | 3.86 |  |  | 3.87 |  |  | 3.94 |  |  | 3.80 |  |  | 3.82 |
Core net interest margin (fully tax equivalent)1 | 3.64 |  |  | 3.69 |  |  | 3.80 |  |  | 3.79 |  |  | 3.77 |  |  | 3.73 |  |  | 3.75 |
Efficiency ratio | 50.45 |  |  | 49.91 |  |  | 66.58 |  |  | 64.70 |  |  | 50.16 |  |  | 57.48 |  |  | 51.70 |
Core efficiency ratio 1 | 50.73 |  |  | 51.73 |  |  | 53.30 |  |  | 54.06 |  |  | 49.77 |  |  | 52.36 |  |  | 52.04 |
Total assets | $ | 7,333,791 |  |  | $ | 7,346,791 |  |  | $ | 7,181,855 |  |  | $ | 6,932,757 |  |  | $ | 5,645,662 |  |  |  |  |
Total average assets | 7,322,496 |  |  | 7,222,357 |  |  | 7,057,605 |  |  | 5,956,086 |  |  | 5,518,740 |  |  | $ | 6,894,291 |  |  | $ | 5,436,963 |
Total deposits | 5,771,023 |  |  | 5,624,380 |  |  | 5,559,338 |  |  | 5,537,113 |  |  | 4,587,985 |  |  |  |  |
Total average deposits | 5,756,292 |  |  | 5,597,343 |  |  | 5,582,072 |  |  | 4,699,490 |  |  | 4,434,634 |  |  | 5,412,211 |  |  | 4,262,028 |
Period end common shares outstanding | 26,543 |  |  | 26,613 |  |  | 26,906 |  |  | 26,878 |  |  | 22,812 |  |  |  |  |
Dividends per common share | $ | 0.17 |  |  | $ | 0.16 |  |  | $ | 0.15 |  |  | $ | 0.14 |  |  | $ | 0.13 |  |  | $ | 0.62 |  |  | $ | 0.47 |
Tangible book value per common share | $ | 23.76 |  |  | $ | 22.82 |  |  | $ | 21.74 |  |  | $ | 20.80 |  |  | $ | 20.95 |  |  |  |  |
Tangible common equity to tangible assets 1 | 8.89 | % |  | 8.54 | % |  | 8.43 | % |  | 8.35 | % |  | 8.66 | % |  |  |  |
Total risk-based capital to risk-weighted assets | 12.89 |  |  | 12.72 |  |  | 12.62 |  |  | 12.86 |  |  | 13.02 |  |  |  |  |
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)

| Quarter ended |  | Year ended
($ in thousands, except per share data) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018 |  | Dec 31, 2019 |  | Dec 31, 2018
INCOME STATEMENTS |  |  |  |  |  |  |  |  |  |  |  |  |
NET INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Total interest income | $ | 77,238 |  |  | $ | 81,078 |  |  | $ | 79,201 |  |  | $ | 67,617 |  |  | $ | 64,002 |  |  | $ | 305,134 |  |  | $ | 237,802 |
Total interest expense | 15,625 |  |  | 18,032 |  |  | 17,486 |  |  | 15,274 |  |  | 13,409 |  |  | 66,417 |  |  | 45,897 |
Net interest income | 61,613 |  |  | 63,046 |  |  | 61,715 |  |  | 52,343 |  |  | 50,593 |  |  | 238,717 |  |  | 191,905 |
Provision for loan losses | 1,341 |  |  | 1,833 |  |  | 1,722 |  |  | 1,476 |  |  | 2,120 |  |  | 6,372 |  |  | 6,644 |
Net interest income after provision for loan losses | 60,272 |  |  | 61,213 |  |  | 59,993 |  |  | 50,867 |  |  | 48,473 |  |  | 232,345 |  |  | 185,261 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit service charges | 3,254 |  |  | 3,246 |  |  | 3,366 |  |  | 2,935 |  |  | 2,894 |  |  | 12,801 |  |  | 11,749 |
Wealth management revenue | 2,618 |  |  | 2,661 |  |  | 2,661 |  |  | 1,992 |  |  | 1,974 |  |  | 9,932 |  |  | 8,241 |
Card services revenue | 2,409 |  |  | 2,494 |  |  | 2,461 |  |  | 1,790 |  |  | 1,760 |  |  | 9,154 |  |  | 6,686 |
Tax credit income | 3,425 |  |  | 1,238 |  |  | 572 |  |  | 158 |  |  | 2,312 |  |  | 5,393 |  |  | 2,820 |
Gain (loss) on sale of investment securities | (94 | ) |  | 337 |  |  | — |  |  | — |  |  | — |  |  | 243 |  |  | 9 |
Other income | 2,806 |  |  | 3,588 |  |  | 2,904 |  |  | 2,355 |  |  | 1,762 |  |  | 11,653 |  |  | 8,842 |
Total noninterest income | 14,418 |  |  | 13,564 |  |  | 11,964 |  |  | 9,230 |  |  | 10,702 |  |  | 49,176 |  |  | 38,347 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation and benefits | 20,411 |  |  | 20,845 |  |  | 20,687 |  |  | 19,352 |  |  | 16,669 |  |  | 81,295 |  |  | 66,039 |
Occupancy | 3,461 |  |  | 3,179 |  |  | 3,188 |  |  | 2,637 |  |  | 2,408 |  |  | 12,465 |  |  | 9,550 |
Merger related expenses | — |  |  | 393 |  |  | 10,306 |  |  | 7,270 |  |  | 1,271 |  |  | 17,969 |  |  | 1,271 |
Other | 14,482 |  |  | 13,822 |  |  | 14,873 |  |  | 10,579 |  |  | 10,399 |  |  | 53,756 |  |  | 42,171 |
Total noninterest expenses | 38,354 |  |  | 38,239 |  |  | 49,054 |  |  | 39,838 |  |  | 30,747 |  |  | 165,485 |  |  | 119,031 |
Income before income tax expense | 36,336 |  |  | 36,538 |  |  | 22,903 |  |  | 20,259 |  |  | 28,428 |  |  | 116,036 |  |  | 104,577 |
Income tax expense | 7,246 |  |  | 7,469 |  |  | 4,479 |  |  | 4,103 |  |  | 4,899 |  |  | 23,297 |  |  | 15,360 |
Net income | $ | 29,090 |  |  | $ | 29,069 |  |  | $ | 18,424 |  |  | $ | 16,156 |  |  | $ | 23,529 |  |  | $ | 92,739 |  |  | $ | 89,217 |
Basic earnings per share | $ | 1.10 |  |  | $ | 1.09 |  |  | $ | 0.69 |  |  | $ | 0.68 |  |  | $ | 1.02 |  |  | $ | 3.56 |  |  | $ | 3.86 |
Diluted earnings per share | 1.09 |  |  | 1.08 |  |  | 0.68 |  |  | 0.67 |  |  | 1.02 |  |  | 3.55 |  |  | 3.83 |

11

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

| Quarter ended
($ in thousands) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018
BALANCE SHEETS |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 74,769 |  |  | $ | 153,730 |  |  | $ | 106,835 |  |  | $ | 85,578 |  |  | $ | 91,511 |
Interest-earning deposits | 96,217 |  |  | 106,747 |  |  | 85,315 |  |  | 139,389 |  |  | 108,226 |
Debt and equity investments | 1,354,527 |  |  | 1,354,986 |  |  | 1,328,767 |  |  | 1,198,413 |  |  | 813,702 |
Loans held for sale | 5,570 |  |  | 6,281 |  |  | 1,437 |  |  | 654 |  |  | 392 |
Loans | 5,314,337 |  |  | 5,228,014 |  |  | 5,149,497 |  |  | 5,017,077 |  |  | 4,350,001 |
Less: Allowance for loan losses | 43,288 |  |  | 44,555 |  |  | 43,822 |  |  | 43,095 |  |  | 43,476 |
Total loans, net | 5,271,049 |  |  | 5,183,459 |  |  | 5,105,675 |  |  | 4,973,982 |  |  | 4,306,525 |
Fixed assets, net | 60,013 |  |  | 59,216 |  |  | 58,888 |  |  | 60,301 |  |  | 32,109 |
Goodwill | 210,344 |  |  | 211,251 |  |  | 211,251 |  |  | 207,632 |  |  | 117,345 |
Intangible assets, net | 26,076 |  |  | 27,626 |  |  | 29,201 |  |  | 31,048 |  |  | 8,553 |
Other assets | 235,226 |  |  | 243,495 |  |  | 254,486 |  |  | 235,760 |  |  | 167,299 |
Total assets | $ | 7,333,791 |  |  | $ | 7,346,791 |  |  | $ | 7,181,855 |  |  | $ | 6,932,757 |  |  | $ | 5,645,662 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Noninterest-bearing deposits | $ | 1,327,348 |  |  | $ | 1,295,450 |  |  | $ | 1,181,577 |  |  | $ | 1,186,508 |  |  | $ | 1,100,718 |
Interest-bearing deposits | 4,443,675 |  |  | 4,328,930 |  |  | 4,377,761 |  |  | 4,350,605 |  |  | 3,487,267 |
Total deposits | 5,771,023 |  |  | 5,624,380 |  |  | 5,559,338 |  |  | 5,537,113 |  |  | 4,587,985 |
Subordinated debentures | 141,258 |  |  | 141,179 |  |  | 141,100 |  |  | 140,668 |  |  | 118,156 |
FHLB advances | 222,406 |  |  | 461,426 |  |  | 389,446 |  |  | 180,466 |  |  | 70,000 |
Other borrowings | 265,172 |  |  | 199,634 |  |  | 198,104 |  |  | 212,171 |  |  | 223,450 |
Other liabilities | 66,747 |  |  | 74,077 |  |  | 68,366 |  |  | 64,504 |  |  | 42,267 |
Total liabilities | 6,466,606 |  |  | 6,500,696 |  |  | 6,356,354 |  |  | 6,134,922 |  |  | 5,041,858 |
Shareholders’ equity | 867,185 |  |  | 846,095 |  |  | 825,501 |  |  | 797,835 |  |  | 603,804 |
Total liabilities and shareholders’ equity | $ | 7,333,791 |  |  | $ | 7,346,791 |  |  | $ | 7,181,855 |  |  | $ | 6,932,757 |  |  | $ | 5,645,662 |

12

Average Balance Sheets
The following table presents, 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.

| Year ended
| December 31, 2019 |  | December 31, 2018
($ 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* | $ | 5,018,568 |  |  | $ | 265,081 |  |  | 5.28 | % |  | $ | 4,222,359 |  |  | $ | 213,980 |  |  | 5.07 | %
Investments in debt and equity securities* | 1,196,074 |  |  | 34,753 |  |  | 2.91 |  |  | 752,265 |  |  | 19,801 |  |  | 2.63 |
Short-term investments | 107,433 |  |  | 2,128 |  |  | 1.98 |  |  | 66,771 |  |  | 1,141 |  |  | 1.71 |
Total earning assets | 6,322,075 |  |  | 301,962 |  |  | 4.78 |  |  | 5,041,395 |  |  | 234,922 |  |  | 4.66 |
Noninterest-earning assets | 572,216 |  |  |  |  |  |  | 395,568 |  |  |  |  |
Total assets | $ | 6,894,291 |  |  |  |  |  |  | $ | 5,436,963 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-bearing transaction accounts | $ | 1,286,641 |  |  | $ | 7,592 |  |  | 0.59 | % |  | $ | 827,155 |  |  | $ | 3,643 |  |  | 0.44 | %
Money market accounts | 1,608,349 |  |  | 26,267 |  |  | 1.63 |  |  | 1,488,238 |  |  | 19,361 |  |  | 1.30 |
Savings | 489,310 |  |  | 841 |  |  | 0.17 |  |  | 206,286 |  |  | 597 |  |  | 0.29 |
Certificates of deposit | 799,079 |  |  | 15,156 |  |  | 1.90 |  |  | 653,486 |  |  | 10,168 |  |  | 1.56 |
Total interest-bearing deposits | 4,183,379 |  |  | 49,856 |  |  | 1.19 |  |  | 3,175,165 |  |  | 33,769 |  |  | 1.06 |
Subordinated debentures | 136,950 |  |  | 7,507 |  |  | 5.48 |  |  | 118,129 |  |  | 5,798 |  |  | 4.91 |
FHLB advances | 287,474 |  |  | 6,668 |  |  | 2.32 |  |  | 271,493 |  |  | 5,556 |  |  | 2.05 |
Securities sold under agreements to repurchase | 169,179 |  |  | 1,246 |  |  | 0.74 |  |  | 170,963 |  |  | 755 |  |  | 0.44 |
Other borrowings | 32,392 |  |  | 1,140 |  |  | 3.52 |  |  | 773 |  |  | 19 |  |  | 2.46 |
Total interest-bearing liabilities | 4,809,374 |  |  | 66,417 |  |  | 1.38 |  |  | 3,736,523 |  |  | 45,897 |  |  | 1.23 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 1,228,832 |  |  |  |  |  |  | 1,086,863 |  |  |  |  |
Other liabilities | 60,608 |  |  |  |  |  |  | 36,617 |  |  |  |  |
Total liabilities | 6,098,814 |  |  |  |  |  |  | 4,860,003 |  |  |  |  |
Shareholders’ equity | 795,477 |  |  |  |  |  |  | 576,960 |  |  |  |  |
Total liabilities and shareholders’ equity | $ | 6,894,291 |  |  |  |  |  |  | $ | 5,436,963 |  |  |  |  |
Core net interest income 1 |  |  | 235,545 |  |  |  |  |  |  | 189,025 |  |  |
Core net interest margin 1 |  |  |  |  | 3.73 | % |  |  |  |  |  | 3.75 | %
Incremental accretion on non-core acquired loans |  |  | 4,783 |  |  |  |  |  |  | 3,700 |  |  |
Total net interest income |  |  | $ | 240,328 |  |  |  |  |  |  | $ | 192,725 |  |  |
Net interest margin |  |  |  |  | 3.80 | % |  |  |  |  |  | 3.82 | %
* Non-taxable income is presented on a fully tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $1.6 million, and $0.8 million for the years ended December 31, 2019, and 2018, respectively.

13

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

| Quarter ended
($ in thousands) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018
LOAN PORTFOLIO |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 2,361,157 |  |  | $ | 2,303,495 |  |  | $ | 2,265,480 |  |  | $ | 2,227,050 |  |  | $ | 2,123,167 |
Commercial real estate | 1,997,321 |  |  | 1,967,888 |  |  | 1,940,958 |  |  | 1,870,040 |  |  | 1,481,834 |
Construction real estate | 457,273 |  |  | 433,486 |  |  | 404,557 |  |  | 369,365 |  |  | 334,645 |
Residential real estate | 366,261 |  |  | 386,173 |  |  | 409,200 |  |  | 432,902 |  |  | 305,026 |
Consumer and other | 132,325 |  |  | 136,972 |  |  | 129,302 |  |  | 117,720 |  |  | 105,329 |
Total loans | $ | 5,314,337 |  |  | $ | 5,228,014 |  |  | $ | 5,149,497 |  |  | $ | 5,017,077 |  |  | $ | 4,350,001 |
DEPOSIT PORTFOLIO |  |  |  |  |  |  |  |  |
Noninterest-bearing accounts | $ | 1,327,348 |  |  | $ | 1,295,450 |  |  | $ | 1,181,577 |  |  | $ | 1,186,508 |  |  | $ | 1,100,718 |
Interest-bearing transaction accounts | 1,367,444 |  |  | 1,307,855 |  |  | 1,392,586 |  |  | 1,389,826 |  |  | 1,037,684 |
Money market and savings accounts | 2,249,784 |  |  | 2,201,052 |  |  | 2,162,605 |  |  | 2,156,031 |  |  | 1,765,154 |
Brokered certificates of deposit | 215,758 |  |  | 209,754 |  |  | 213,138 |  |  | 180,788 |  |  | 198,981 |
Other certificates of deposit | 610,689 |  |  | 610,269 |  |  | 609,432 |  |  | 623,960 |  |  | 485,448 |
Total deposit portfolio | $ | 5,771,023 |  |  | $ | 5,624,380 |  |  | $ | 5,559,338 |  |  | $ | 5,537,113 |  |  | $ | 4,587,985 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |
Total loans | $ | 5,279,500 |  |  | $ | 5,178,009 |  |  | $ | 5,095,181 |  |  | $ | 4,511,387 |  |  | $ | 4,272,132 |
Debt and equity investments | 1,322,017 |  |  | 1,312,860 |  |  | 1,246,529 |  |  | 896,936 |  |  | 769,461 |
Interest-earning assets | 6,704,506 |  |  | 6,604,083 |  |  | 6,453,001 |  |  | 5,510,489 |  |  | 5,118,319 |
Total assets | 7,322,496 |  |  | 7,222,357 |  |  | 7,057,605 |  |  | 5,956,086 |  |  | 5,518,740 |
Deposits | 5,756,292 |  |  | 5,597,343 |  |  | 5,582,072 |  |  | 4,699,490 |  |  | 4,434,634 |
Shareholders’ equity | 859,674 |  |  | 843,974 |  |  | 813,106 |  |  | 662,454 |  |  | 597,864 |
Tangible common equity 1 | 622,502 |  |  | 604,331 |  |  | 571,890 |  |  | 506,560 |  |  | 471,678 |
YIELDS (fully tax equivalent) |  |  |  |  |  |  |  |  |
Total loans | 5.08 | % |  | 5.47 | % |  | 5.49 | % |  | 5.50 | % |  | 5.44 | %
Debt and equity investments | 2.91 |  |  | 2.90 |  |  | 2.95 |  |  | 2.84 |  |  | 2.73 |
Interest-earning assets | 4.60 |  |  | 4.90 |  |  | 4.95 |  |  | 4.99 |  |  | 4.98 |
Interest-bearing deposits | 1.05 |  |  | 1.20 |  |  | 1.21 |  |  | 1.33 |  |  | 1.27 |
Total deposits | 0.81 |  |  | 0.94 |  |  | 0.94 |  |  | 1.02 |  |  | 0.95 |
Subordinated debentures | 5.46 |  |  | 5.50 |  |  | 5.57 |  |  | 5.38 |  |  | 5.01 |
FHLB advances and other borrowed funds | 1.57 |  |  | 1.99 |  |  | 2.07 |  |  | 1.75 |  |  | 1.60 |
Interest-bearing liabilities | 1.23 |  |  | 1.41 |  |  | 1.42 |  |  | 1.49 |  |  | 1.42 |
Net interest margin | 3.68 |  |  | 3.81 |  |  | 3.86 |  |  | 3.87 |  |  | 3.94 |

1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.
14

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

| Quarter ended
(in thousands, except per share data) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018
ASSET QUALITY |  |  |  |  |  |  |  |  |
Net charge-offs | $ | 2,544 |  |  | $ | 1,070 |  |  | $ | 970 |  |  | $ | 1,826 |  |  | $ | 2,822 |
Nonperforming loans | 26,425 |  |  | 15,569 |  |  | 19,842 |  |  | 9,607 |  |  | 16,745 |
Classified assets | 85,897 |  |  | 93,984 |  |  | 91,715 |  |  | 79,750 |  |  | 70,126 |
Nonperforming loans to total loans | 0.50 | % |  | 0.30 | % |  | 0.39 | % |  | 0.19 | % |  | 0.38 | %
Nonperforming assets to total assets | 0.45 |  |  | 0.33 |  |  | 0.42 |  |  | 0.24 |  |  | 0.30 |
Allowance for loan losses to total loans | 0.81 |  |  | 0.85 |  |  | 0.85 |  |  | 0.86 |  |  | 1.00 |
Allowance for loan losses to nonperforming loans | 163.8 |  |  | 286.2 |  |  | 220.9 |  |  | 448.6 |  |  | 259.6 |
Net charge-offs to average loans (annualized) | 0.19 |  |  | 0.08 |  |  | 0.08 |  |  | 0.16 |  |  | 0.26 |
WEALTH MANAGEMENT |  |  |  |  |  |  |  |  |
Trust assets under management | $ | 1,671,082 |  |  | $ | 1,583,260 |  |  | $ | 1,627,050 |  |  | $ | 1,587,627 |  |  | $ | 1,119,329 |
Trust assets under administration | 2,524,478 |  |  | 2,404,950 |  |  | 2,428,551 |  |  | 2,405,673 |  |  | 1,811,512 |
MARKET DATA |  |  |  |  |  |  |  |  |
Book value per common share | $ | 32.67 |  |  | $ | 31.79 |  |  | $ | 30.68 |  |  | $ | 29.68 |  |  | $ | 26.47 |
Tangible book value per common share 1 | 23.76 |  |  | 22.82 |  |  | 21.74 |  |  | 20.80 |  |  | 20.95 |
Market value per share | 48.21 |  |  | 40.75 |  |  | 41.60 |  |  | 40.77 |  |  | 37.63 |
Period end common shares outstanding | 26,543 |  |  | 26,613 |  |  | 26,906 |  |  | 26,878 |  |  | 22,812 |
Average basic common shares | 26,540 |  |  | 26,778 |  |  | 26,887 |  |  | 23,927 |  |  | 23,014 |
Average diluted common shares | 26,668 |  |  | 26,868 |  |  | 26,940 |  |  | 24,083 |  |  | 23,170 |
CAPITAL |  |  |  |  |  |  |  |  |
Total risk-based capital to risk-weighted assets | 12.89 | % |  | 12.72 | % |  | 12.62 | % |  | 12.86 | % |  | 13.02 | %
Tier 1 capital to risk-weighted assets | 11.38 |  |  | 11.17 |  |  | 11.06 |  |  | 11.25 |  |  | 11.14 |
Common equity tier 1 capital to risk-weighted assets | 9.88 |  |  | 9.64 |  |  | 9.51 |  |  | 9.64 |  |  | 9.79 |
Tangible common equity to tangible assets 1 | 8.89 |  |  | 8.54 |  |  | 8.43 |  |  | 8.35 |  |  | 8.66 |
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

15

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

| Quarter ended |  | Year ended
($ in thousands, except per share data) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018 |  | Dec 31, 2019 |  | Dec 31, 2018
CORE PERFORMANCE MEASURES |  |  |  |
Net interest income | $ | 61,613 |  |  | $ | 63,046 |  |  | $ | 61,715 |  |  | $ | 52,343 |  |  | $ | 50,593 |  |  | $ | 238,717 |  |  | $ | 191,905 |
Less: Incremental accretion income | 576 |  |  | 2,140 |  |  | 910 |  |  | 1,157 |  |  | 2,109 |  |  | 4,783 |  |  | 3,701 |
Core net interest income | 61,037 |  |  | 60,906 |  |  | 60,805 |  |  | 51,186 |  |  | 48,484 |  |  | 233,934 |  |  | 188,204 |
Total noninterest income | 14,418 |  |  | 13,564 |  |  | 11,964 |  |  | 9,230 |  |  | 10,702 |  |  | 49,176 |  |  | 38,347 |
Less: Other income from non-core acquired assets | 4 |  |  | 1,001 |  |  | 2 |  |  | 365 |  |  | 10 |  |  | 1,372 |  |  | 1,048 |
Less: Gain (loss) on sale of investment securities | (94 | ) |  | 337 |  |  | — |  |  | — |  |  | — |  |  | 243 |  |  | 9 |
Less: Other non-core income | — |  |  | — |  |  | 266 |  |  | — |  |  | 26 |  |  | 266 |  |  | 675 |
Core noninterest income | 14,508 |  |  | 12,226 |  |  | 11,696 |  |  | 8,865 |  |  | 10,666 |  |  | 47,295 |  |  | 36,615 |
Total core revenue | 75,545 |  |  | 73,132 |  |  | 72,501 |  |  | 60,051 |  |  | 59,150 |  |  | 281,229 |  |  | 224,819 |
Total noninterest expense | 38,354 |  |  | 38,239 |  |  | 49,054 |  |  | 39,838 |  |  | 30,747 |  |  | 165,485 |  |  | 119,031 |
Less: Other expenses related to non-core acquired loans | 33 |  |  | 18 |  |  | 103 |  |  | 103 |  |  | 40 |  |  | 257 |  |  | (163 | )
Less: Facilities disposal | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 239 |
Less: Merger related expenses | — |  |  | 393 |  |  | 10,306 |  |  | 7,270 |  |  | 1,271 |  |  | 17,969 |  |  | 1,271 |
Less: Non-recurring excise tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 682 |
Core noninterest expense | 38,321 |  |  | 37,828 |  |  | 38,645 |  |  | 32,465 |  |  | 29,436 |  |  | 147,259 |  |  | 117,002 |
Core efficiency ratio | 50.73 | % |  | 51.73 | % |  | 53.30 | % |  | 54.06 | % |  | 49.77 | % |  | 52.36 | % |  | 52.04 | %
NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (FULLY TAX EQUIVALENT) |  |  |  |
Net interest income | $ | 62,141 |  |  | $ | 63,483 |  |  | $ | 62,109 |  |  | $ | 52,595 |  |  | $ | 50,786 |  |  | $ | 240,328 |  |  | $ | 192,725 |
Less: Incremental accretion income | 576 |  |  | 2,140 |  |  | 910 |  |  | 1,157 |  |  | 2,109 |  |  | 4,783 |  |  | 3,701 |
Core net interest income | $ | 61,565 |  |  | $ | 61,343 |  |  | $ | 61,199 |  |  | $ | 51,438 |  |  | $ | 48,677 |  |  | $ | 235,545 |  |  | $ | 189,024 |
Average earning assets | $ | 6,704,506 |  |  | $ | 6,604,083 |  |  | $ | 6,453,005 |  |  | $ | 5,510,489 |  |  | $ | 5,118,319 |  |  | $ | 6,322,075 |  |  | $ | 5,041,395 |
Reported net interest margin | 3.68 | % |  | 3.81 | % |  | 3.86 | % |  | 3.87 | % |  | 3.94 | % |  | 3.80 | % |  | 3.82 | %
Core net interest margin | 3.64 |  |  | 3.69 |  |  | 3.80 |  |  | 3.79 |  |  | 3.77 |  |  | 3.73 |  |  | 3.75 |

16

| Quarter ended
($ in thousands) | Dec 31, 2019 |  | Sep 30, 2019 |  | Jun 30, 2019 |  | Mar 31, 2019 |  | Dec 31, 2018
SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity | $ | 867,185 |  |  | $ | 846,095 |  |  | $ | 825,501 |  |  | $ | 797,835 |  |  | $ | 603,804 |
Less: Goodwill | 210,344 |  |  | 211,251 |  |  | 211,251 |  |  | 207,632 |  |  | 117,345 |
Less: Intangible assets | 26,076 |  |  | 27,626 |  |  | 29,201 |  |  | 31,048 |  |  | 8,553 |
Tangible common equity | $ | 630,765 |  |  | $ | 607,218 |  |  | $ | 585,049 |  |  | $ | 559,155 |  |  | $ | 477,906 |
Total assets | $ | 7,333,791 |  |  | $ | 7,346,791 |  |  | $ | 7,181,855 |  |  | $ | 6,932,757 |  |  | $ | 5,645,662 |
Less: Goodwill | 210,344 |  |  | 211,251 |  |  | 211,251 |  |  | 207,632 |  |  | 117,345 |
Less: Intangible assets | 26,076 |  |  | 27,626 |  |  | 29,201 |  |  | 31,048 |  |  | 8,553 |
Tangible assets | $ | 7,097,371 |  |  | $ | 7,107,914 |  |  | $ | 6,941,403 |  |  | $ | 6,694,077 |  |  | $ | 5,519,764 |
Tangible common equity to tangible assets | 8.89 | % |  | 8.54 | % |  | 8.43 | % |  | 8.35 | % |  | 8.66 | %

| Quarter ended
($ in thousands) | Dec 31, 2019 |  | Sep 30, 2019 |  | Dec 31, 2018
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity | $ | 859,674 |  |  | $ | 843,974 |  |  | $ | 597,864 |
Less average goodwill | 210,344 |  |  | 211,251 |  |  | 117,345 |
Less average intangible assets | 26,828 |  |  | 28,392 |  |  | 8,841 |
Average tangible common equity | $ | 622,502 |  |  | $ | 604,331 |  |  | $ | 471,678 |

17

| Quarter ended |  | Year ended
(in thousands, except per share data) | Dec 31, 2019 |  | Sep 30, 2019 |  | Dec 31, 2018 |  | Dec 31, 2019
IMPACT OF MERGER-RELATED EXPENSES |  |  |  |  |  |  |
Net income - GAAP | $ | 29,090 |  |  | $ | 29,069 |  |  | $ | 23,529 |  |  | $ | 92,739 |
Merger related expenses | — |  |  | 393 |  |  | 1,271 |  |  | 17,969 |
Related tax effect | — |  |  | (97 | ) |  | (207 | ) |  | (3,963 | )
Adjusted net income - Non-GAAP | $ | 29,090 |  |  | $ | 29,365 |  |  | $ | 24,593 |  |  | $ | 106,745 |
Average diluted common shares | 26,668 |  |  | 26,868 |  |  | 23,170 |  |  | 26,159 |
EPS - GAAP net income | $ | 1.09 |  |  | $ | 1.08 |  |  | $ | 1.02 |  |  | $ | 3.55 |
EPS - Adjusted net income | 1.09 |  |  | 1.09 |  |  | 1.06 |  |  | 4.08 |
Average assets | $ | 7,322,496 |  |  | $ | 7,222,357 |  |  | $ | 5,518,740 |  |  | $ | 6,894,291 |
ROAA - GAAP net income | 1.58 | % |  | 1.60 | % |  | 1.69 | % |  | 1.35 | %
ROAA - Adjusted net income | 1.58 |  |  | 1.61 |  |  | 1.77 |  |  | 1.55 |
Average shareholder’s equity | $ | 859,674 |  |  | $ | 843,974 |  |  | $ | 597,864 |  |  | $ | 795,477 |
ROAE - GAAP net income | 13.42 | % |  | 13.66 | % |  | 15.61 | % |  | 11.66 | %
ROAE - Adjusted net income | 13.42 |  |  | 13.80 |  |  | 16.32 |  |  | 13.42 |
Average tangible common equity | $ | 622,502 |  |  | $ | 604,331 |  |  | $ | 471,678 |  |  | $ | 576,716 |
ROATCE - GAAP net income | 18.54 | % |  | 19.08 | % |  | 19.79 | % |  | 16.08 | %
ROATCE - Adjusted net income | 18.54 |  |  | 19.28 |  |  | 20.69 |  |  | 18.51 |

18