EX-99.1 2 ex991financialstatementsan.htm EARNINGS RELEASE
EXHIBIT 99.1
ENTERPRISE FINANCIAL REPORTS THIRD QUARTER 2022 RESULTS
Third Quarter Results
•Net income of $50.2 million, $1.32 per diluted common share
•Net interest income of $124.3 million, a quarterly increase of $14.7 million, or 13%
•Net interest margin of 4.10%
•Pre-provision return on average assets 1 of 1.96%
•Total loans 2 of $9.3 billion, a quarterly increase of $122.0 million, or 5% annualized
•Increased quarterly dividend $0.01 to $0.24 per common share for the fourth quarter
St. Louis, Mo. October 24, 2022 – Jim Lally, President and Chief Executive Officer of Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”), said today upon the release of EFSC’s third quarter earnings, “Our results for the third quarter continued the momentum we established early in the year and reflects the strength of our diversified franchise. We grew loans, maintained liquidity, expanded net interest income, and reported near record earnings. We continue to be pleased with the credit quality of our loan portfolio and our solid capital position. We believe we are well positioned to finish the year with strong performance.”
Highlights
Comparisons to the prior year are impacted by the acquisition of First Choice Bancorp (“First Choice” or “FCBP”) in the third quarter of 2021.
•Earnings - Net income in the third quarter 2022 was $50.2 million, an increase of $5.1 million compared to the linked quarter and an increase of $36.3 million from the prior year quarter. Earnings per share (“EPS”) was $1.32 per diluted common share for the third quarter 2022, compared to $1.19 and $0.38 per diluted common share for the linked and prior year quarters, respectively.
•Pre-provision net revenue 1 (“PPNR”) - PPNR of $64.9 million in the third quarter 2022 increased $6.5 million and $8.8 million from the linked and prior year quarters, respectively. The increase from both the linked and prior year quarters was primarily due to an increase in operating revenue, partially offset by an increase in noninterest expense. The increase compared to the prior year quarter was also partially attributed to the First Choice acquisition.
•Net interest income and net interest margin (“NIM”) - Net interest income of $124.3 million for the third quarter 2022 increased $14.7 million and $27.0 million from the linked and prior year quarters, respectively. NIM was 4.10% for the third quarter 2022, compared to 3.55% and 3.40% for the linked and prior year quarters, respectively. Net interest income and NIM benefited from higher average loan and investment balances and expanding yields on earning assets, partially offset by higher deposit costs and a decline in average interest-earning cash.
1 Pre-provision return on average assets and pre-provision net revenue are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
2 Excludes PPP loans, which totaled $13.2 million at September 30, 2022.

•Noninterest income - Noninterest income of $9.5 million for the third quarter 2022 decreased $4.7 million and $8.2 million from the linked and prior year quarters, respectively. The decline from both the linked and prior year quarters was primarily due to a decrease in tax credit income and card service revenue. The increase in market interest rates in the quarter reduced tax credit income due to the impact on tax credit projects carried at fair value. Card services revenue declined due to the Durbin Amendment cap on debit card income that became effective July 1, 2022 and reduced card services revenue by approximately $1.0 million in the third quarter.
•Loans - Total loans increased $85.8 million from the linked quarter to $9.4 billion as of September 30, 2022. PPP loans declined $36.0 million to $13.2 million. Excluding PPP loans, loans grew $121.8 million, or 5%, on an annualized basis from the linked quarter. Loans excluding PPP have increased 7% on a year-to-date basis. Average loans totaled $9.2 billion for the quarter ended September 30, 2022, compared to $9.1 billion and $8.7 billion for the linked and prior year quarters, respectively.
•Asset quality - The allowance for credit losses to total loans was 1.50% at September 30, 2022, compared to 1.52% at June 30, 2022 and 1.67% at September 30, 2021. Nonperforming assets to total assets was 0.14% at September 30, 2022, compared to 0.16% and 0.35% at June 30, 2022 and September 30, 2021, respectively. A provision for credit losses of $0.7 million was recorded in the third quarter 2022 due to loan growth and changes in the macroeconomic forecasts, partially offset by a shift in the risk composition of the loan portfolio.
•Deposits - Total deposits decreased $35.0 million from the linked quarter to $11.1 billion as of September 30, 2022. Average deposits totaled $11.2 billion for the quarter ended September 30, 2022, compared to $11.5 billion and $10.3 billion for the linked and prior year quarters, respectively. At September 30, 2022, noninterest-bearing deposit accounts represented 42.0% of total deposits, and the loan to deposit ratio was 84.6%.
•Capital - Total shareholders’ equity was $1.4 billion and the tangible common equity to tangible assets ratio 3 was 7.9% at September 30, 2022, compared to 7.8% at June 30, 2022. Tangible common equity was impacted in the third quarter 2022 by a $45.3 million decrease in the tax-effected fair value of the available-for-sale investment portfolio that reduced accumulated other comprehensive income. This decrease was partially offset by the undistributed earnings in the third quarter 2022. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.2% and a total risk-based capital ratio of 13.2% as of September 30, 2022. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 11.0% and 14.2%, respectively, at September 30, 2022.
The Company’s Board of Directors approved a quarterly dividend of $0.24 per common share, payable on December 30, 2022 to shareholders of record as of December 15, 2022, an increase of $0.01, or 4%, compared to the third quarter 2022. The Board of Directors also declared a cash dividend of $12.50 per share of Series A Preferred Stock (or $0.3125 per depositary share) representing a 5% per annum rate for the period commencing (and including) September 15, 2022 to (but excluding) December 15, 2022. The dividend will be payable on December 15, 2022 to shareholders of record on November 30, 2022.
3 Tangible common equity to tangible assets ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
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Net Interest Income
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.

| Quarter ended
| September 30, 2022 |  | June 30, 2022 |  | September 30, 2021
($ 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 1, 2 | $ | 9,230,738 |  |  | $ | 118,642 |  |  | 5.10 | % |  | $ | 9,109,131 |  |  | $ | 102,328 |  |  | 4.51 | % |  | $ | 8,666,353 |  |  | $ | 94,465 |  |  | 4.32 | %
Securities 2 | 2,202,255 |  |  | 14,717 |  |  | 2.65 |  |  | 2,068,119 |  |  | 12,944 |  |  | 2.51 |  |  | 1,594,938 |  |  | 9,583 |  |  | 2.38 |
Interest-earning deposits | 765,258 |  |  | 4,190 |  |  | 2.17 |  |  | 1,401,961 |  |  | 2,496 |  |  | 0.71 |  |  | 1,251,988 |  |  | 480 |  |  | 0.15 |
Total interest-earning assets | 12,198,251 |  |  | 137,549 |  |  | 4.47 |  |  | 12,579,211 |  |  | 117,768 |  |  | 3.76 |  |  | 11,513,279 |  |  | 104,528 |  |  | 3.60 |
Noninterest-earning assets | 959,870 |  |  |  |  |  |  | 949,263 |  |  |  |  |  |  | 821,279 |  |  |  |  |
Total assets | $ | 13,158,121 |  |  |  |  |  |  | $ | 13,528,474 |  |  |  |  |  |  | $ | 12,334,558 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand accounts | $ | 2,200,619 |  |  | $ | 1,707 |  |  | 0.31 | % |  | $ | 2,329,431 |  |  | $ | 659 |  |  | 0.11 | % |  | $ | 2,228,466 |  |  | $ | 459 |  |  | 0.08 | %
Money market accounts | 2,791,822 |  |  | 6,067 |  |  | 0.86 |  |  | 2,767,595 |  |  | 2,270 |  |  | 0.33 |  |  | 2,675,405 |  |  | 1,294 |  |  | 0.19 |
Savings | 828,747 |  |  | 69 |  |  | 0.03 |  |  | 854,860 |  |  | 70 |  |  | 0.03 |  |  | 747,927 |  |  | 61 |  |  | 0.03 |
Certificates of deposit | 554,987 |  |  | 844 |  |  | 0.60 |  |  | 591,091 |  |  | 851 |  |  | 0.58 |  |  | 604,594 |  |  | 927 |  |  | 0.61 |
Total interest-bearing deposits | 6,376,175 |  |  | 8,687 |  |  | 0.54 |  |  | 6,542,977 |  |  | 3,850 |  |  | 0.24 |  |  | 6,256,392 |  |  | 2,741 |  |  | 0.17 |
Subordinated debentures | 155,225 |  |  | 2,313 |  |  | 5.91 |  |  | 155,092 |  |  | 2,257 |  |  | 5.84 |  |  | 204,011 |  |  | 2,855 |  |  | 5.55 |
FHLB advances | 25,543 |  |  | 103 |  |  | 1.60 |  |  | 50,000 |  |  | 197 |  |  | 1.58 |  |  | 89,457 |  |  | 211 |  |  | 0.94 |
Securities sold under agreements to repurchase | 198,027 |  |  | 123 |  |  | 0.25 |  |  | 202,536 |  |  | 41 |  |  | 0.08 |  |  | 216,403 |  |  | 58 |  |  | 0.11 |
Other borrowings | 19,984 |  |  | 179 |  |  | 3.55 |  |  | 21,414 |  |  | 111 |  |  | 2.08 |  |  | 25,699 |  |  | 90 |  |  | 1.39 |
Total interest-bearing liabilities | 6,774,954 |  |  | 11,405 |  |  | 0.67 |  |  | 6,972,019 |  |  | 6,456 |  |  | 0.37 |  |  | 6,791,962 |  |  | 5,955 |  |  | 0.35 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 4,778,720 |  |  |  |  |  |  | 4,987,455 |  |  |  |  |  |  | 4,040,761 |  |  |  |  |
Other liabilities | 109,943 |  |  |  |  |  |  | 94,733 |  |  |  |  |  |  | 107,739 |  |  |  |  |
Total liabilities | 11,663,617 |  |  |  |  |  |  | 12,054,207 |  |  |  |  |  |  | 10,940,462 |  |  |  |  |
Shareholders' equity | 1,494,504 |  |  |  |  |  |  | 1,474,267 |  |  |  |  |  |  | 1,394,096 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 13,158,121 |  |  |  |  |  |  | $ | 13,528,474 |  |  |  |  |  |  | $ | 12,334,558 |  |  |  |  |
Total net interest income |  |  | $ | 126,144 |  |  |  |  |  |  | $ | 111,312 |  |  |  |  |  |  | $ | 98,573 |  |  |
Net interest margin |  |  |  |  | 4.10 | % |  |  |  |  |  | 3.55 | % |  |  |  |  |  | 3.40 | %
1 Average balances include nonaccrual loans. Interest income includes loan fees of $3.6 million, $4.2 million, and $6.5 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.
2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $1.9 million, $1.7 million, and $1.3 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.

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Net interest income for the third quarter was $124.3 million, an increase of $14.7 million from the linked quarter and an increase of $27.0 million from the prior year period. Interest income increased during the quarter due to higher loan and investment balances combined with an increase in market interest rates. The effective federal funds rate for the third quarter 2022 was 2.20%, an increase of 144 basis points, compared to the linked quarter, and a 211 basis point increase over the prior year quarter. Excess liquidity was redeployed into the investment portfolio which, combined with higher average loan balances, benefited the earning-asset mix. The increase in interest income was partially offset by higher interest expense on the deposit portfolio due to higher costs.
The earning asset yield was 4.47% in the third quarter 2022, an increase of 71 basis points compared to the linked quarter. The average loan yield was 5.10% in the third quarter 2022, an increase of 59 basis points from the linked quarter. The average loan yield increased due to the repricing of variable-rate loans and the origination of new loans at an average rate of 5.68%. Approximately 20% of the variable-rate loan portfolio reprices on the first day of each quarter and thus, interest income in the period did not benefit from the current quarter’s rate movement. These loans will reset early in the fourth quarter.
The average investment yield was 2.65%, an increase of 14 basis points from the linked quarter. The investment yield increased due to the purchase of new investments at higher yields due to the expansion of the investment portfolio and the reinvestment of cash flows at higher interest rates. Investments purchased in the third quarter 2022 had a tax equivalent average yield of 3.68%.
The interest-bearing liability yield was 0.67% in the third quarter 2022, an increase of 30 basis points compared to the linked quarter. The average cost of interest-bearing deposits was 0.54% in the third quarter 2022, an increase of 30 basis points over the linked quarter. The increase was primarily due to higher rates paid on commercial money market accounts, which increased 53 basis points to 0.86% in the third quarter 2022. While deposit rates have increased, the pace of increase has continued to lag the increase in loan rates, resulting in a positive impact on our NIM. The total cost of deposits, including noninterest-bearing demand accounts, was 31 basis points during the third quarter 2022.
NIM, on a tax equivalent basis, was 4.10% in the third quarter 2022, an increase of 55 basis points from the linked quarter and an increase of 70 basis points from the prior year quarter, as changing interest rates had a greater impact on assets with variable interest rates than on deposit costs.
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Loans
The following table presents total loans for the most recent five quarters:

| Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | March 31, 2022 |  | December 31, 2021 |  | September 30, 2021
C&I | $ | 1,842,510 |  |  | $ | 1,702,081 |  |  | $ | 1,498,151 |  |  | $ | 1,538,155 |  |  | $ | 1,458,078 |
CRE investor owned | 2,106,458 |  |  | 1,977,806 |  |  | 1,982,645 |  |  | 1,955,087 |  |  | 1,935,284 |
CRE owner occupied | 1,133,467 |  |  | 1,118,895 |  |  | 1,138,106 |  |  | 1,112,463 |  |  | 1,163,236 |
SBA loans* | 1,269,065 |  |  | 1,284,279 |  |  | 1,249,929 |  |  | 1,241,449 |  |  | 1,199,758 |
Sponsor finance* | 650,102 |  |  | 647,180 |  |  | 641,476 |  |  | 508,469 |  |  | 454,431 |
Life insurance premium financing* | 717,773 |  |  | 688,035 |  |  | 636,096 |  |  | 593,562 |  |  | 572,492 |
Tax credits* | 507,681 |  |  | 550,662 |  |  | 518,020 |  |  | 486,881 |  |  | 462,168 |
SBA PPP loans | 13,165 |  |  | 49,175 |  |  | 134,084 |  |  | 271,958 |  |  | 438,959 |
Residential real estate | 381,634 |  |  | 391,867 |  |  | 410,173 |  |  | 430,985 |  |  | 519,859 |
Construction and land development | 513,452 |  |  | 626,577 |  |  | 610,830 |  |  | 625,526 |  |  | 652,227 |
Other | 219,680 |  |  | 232,619 |  |  | 236,563 |  |  | 253,107 |  |  | 260,091 |
Total loans | $ | 9,354,987 |  |  | $ | 9,269,176 |  |  | $ | 9,056,073 |  |  | $ | 9,017,642 |  |  | $ | 9,116,583 |
Total loan yield | 5.10 | % |  | 4.51 | % |  | 4.34 | % |  | 4.32 | % |  | 4.32 | %
Variable interest rate loans to total loans | 63 | % |  | 64 | % |  | 63 | % |  | 63 | % |  | 63 | %
*Specialty loan category

Loans totaled $9.4 billion at September 30, 2022, increasing $85.8 million, compared to the linked quarter. PPP loans declined $36.0 million in the third quarter 2022 to $13.2 million at September 30, 2022 as a result of continued loan forgiveness by the Small Business Administration (“SBA”). Excluding PPP loans, loans grew $121.8 million, or 5% on an annualized basis, from the linked quarter. The increase was driven primarily by C&I and CRE loans, partially offset by a decline in construction loans. Average line utilization was approximately 43% for the quarter ended September 30, 2022, compared to 44% and 38.2% for the linked and prior year quarters, respectively.
Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:

| Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | March 31, 2022 |  | December 31, 2021 |  | September 30, 2021
Nonperforming loans* | $ | 18,184 |  |  | $ | 19,560 |  |  | $ | 21,160 |  |  | $ | 28,024 |  |  | $ | 41,554 |
Other real estate | 269 |  |  | 955 |  |  | 1,459 |  |  | 3,493 |  |  | 3,493 |
Nonperforming assets* | $ | 18,453 |  |  | $ | 20,515 |  |  | $ | 22,619 |  |  | $ | 31,517 |  |  | $ | 45,047 |
Nonperforming loans to total loans | 0.19 | % |  | 0.21 | % |  | 0.23 | % |  | 0.31 | % |  | 0.46 | %
Nonperforming assets to total assets | 0.14 | % |  | 0.16 | % |  | 0.17 | % |  | 0.23 | % |  | 0.35 | %
Allowance for credit losses to total loans | 1.50 | % |  | 1.52 | % |  | 1.54 | % |  | 1.61 | % |  | 1.67 | %
Net charge-offs (recoveries) | $ | 478 |  |  | $ | (175) |  |  | $ | 1,521 |  |  | $ | 3,263 |  |  | $ | 1,850 |
*Guaranteed balances excluded | $ | 6,532 |  |  | $ | 6,063 |  |  | $ | 3,954 |  |  | $ | 6,481 |  |  | $ | 5,109 |

Nonperforming assets declined $2.1 million during the third quarter 2022 and $26.6 million from the prior year quarter. Net charge-offs to average loans were two basis points in the third quarter 2022, compared to one basis point of net recoveries in the linked quarter and eight basis points of net charge-offs in the prior year quarter. The
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Company recorded a provision for credit losses of $0.7 million in both the linked and current quarters, compared to $19.7 million in the prior year quarter. The prior year quarter included a provision for credit losses of $23.9 million to establish the initial allowance for credit losses on certain First Choice acquired loans.
The allowance for credit losses to total loans was 1.50% at September 30, 2022, a decrease of two basis points from the linked quarter. Loan growth and a worsening economic forecast increased the allowance for credit losses during the quarter. This increase was partially offset by the improvement in credit quality and a shift in the composition of the loan portfolio to categories with lower reserve levels. Loan growth in the quarter primarily was in commercial real estate and C&I loans that have a lower reserve level, while construction loans with a higher reserve level declined.
Deposits
The following table presents deposits broken out by type for the most recent five quarters:

| Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | March 31, 2022 |  | December 31, 2021 |  | September 30, 2021
Noninterest-bearing demand accounts | $ | 4,642,539 |  |  | $ | 4,746,478 |  |  | $ | 4,881,043 |  |  | $ | 4,578,436 |  |  | $ | 4,375,713 |
Interest-bearing demand accounts | 2,270,898 |  |  | 2,197,957 |  |  | 2,547,482 |  |  | 2,465,884 |  |  | 2,253,639 |
Money market and savings accounts | 3,617,249 |  |  | 3,562,982 |  |  | 3,678,135 |  |  | 3,691,186 |  |  | 3,571,252 |
Brokered certificates of deposit | 129,039 |  |  | 129,064 |  |  | 129,017 |  |  | 128,970 |  |  | 128,923 |
Other certificates of deposit | 397,869 |  |  | 456,137 |  |  | 468,458 |  |  | 479,323 |  |  | 498,248 |
Total deposit portfolio | $ | 11,057,594 |  | $ | 11,057,594 |  | $ | 11,092,618 |  |  | $ | 11,704,135 |  |  | $ | 11,343,799 |  |  | $ | 10,827,775 |
Noninterest-bearing deposits to total deposits | 42.0 | % |  | 42.8 | % |  | 41.7 | % |  | 40.4 | % |  | 40.4 | %

Total deposits at September 30, 2022 were $11.1 billion, a decrease of $35.0 million from June 30, 2022, and an increase of $229.8 million from September 30, 2021. Noninterest-bearing deposits declined $103.9 million from the linked quarter, primarily due to a large commercial client outflow related to a company acquisition in the Kansas City market. The total cost of deposits was 0.31% for the current quarter, compared to 0.13% for the linked quarter and 0.11% for the prior year quarter.
Noninterest Income and Expense
The following tables present a comparative summary of the major components of noninterest income, other income, and noninterest expense for the periods indicated:

| Linked quarter comparison |  | Prior year comparison
| Quarter ended |  | Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | Increase (decrease) |  | September 30, 2021 |  | Increase (decrease)
Deposit service charges | 4,951 |  |  | 4,749 |  |  | $ | 202 |  |  | 4 | % |  | $ | 4,520 |  |  | $ | 431 |  |  | 10 | %
Wealth management revenue | 2,432 |  |  | 2,533 |  |  | (101) |  |  | (4) | % |  | 2,573 |  |  | (141) |  |  | (5) | %
Card services revenue | 2,652 |  |  | 3,514 |  |  | (862) |  |  | (25) | % |  | 3,186 |  |  | (534) |  |  | (17) | %
Tax credit income (loss) | (3,625) |  |  | 1,186 |  |  | (4,811) |  |  | (406) | % |  | 3,325 |  |  | (6,950) |  |  | (209) | %
Other income | 3,044 |  |  | 2,212 |  |  | 832 |  |  | 38 | % |  | 4,015 |  |  | (971) |  |  | (24) | %
Total noninterest income | $ | 9,454 |  |  | $ | 14,194 |  |  | $ | (4,740) |  |  | (33) | % |  | $ | 17,619 |  |  | $ | (8,165) |  |  | (46) | %

Total noninterest income for the third quarter 2022 was $9.5 million, a decrease of $4.7 million from the linked quarter and a decrease of $8.2 million from the prior year quarter. The decrease from the linked and prior year quarters was primarily due to decreases in tax credit income and card services revenue. Rising interest rates reduced
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tax credit income due to the impact on tax credit projects carried at fair value. The rise in interest rates in the third quarter 2022 increased the discount rate used in the fair value of these projects, resulting in a lower fair value. The Durbin Amendment limits the amount of interchange income the Company can earn on debit card transactions. This limitation went into effect for the Company in the third quarter 2022 and reduced card services revenue.

| Linked quarter comparison |  | Prior year comparison
| Quarter ended |  | Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | Increase (decrease) |  | September 30, 2021 |  | Increase (decrease)
BOLI | $ | 769 |  |  | $ | 748 |  |  | $ | 21 |  |  | 3 | % |  | $ | 739 |  |  | $ | 30 |  |  | 4 | %
Community development investments | 170 |  |  | 193 |  |  | (23) |  |  | (12) | % |  | 206 |  |  | (36) |  |  | (17) | %
Mortgage banking | 45 |  |  | 43 |  |  | 2 |  |  | 5 | % |  | 509 |  |  | (464) |  |  | (91) | %
Private equity fund distribution | 64 |  |  | 240 |  |  | (176) |  |  | (73) | % |  | 359 |  |  | (295) |  |  | (82) | %
Servicing fees | 655 |  |  | 165 |  |  | 490 |  |  | 297 | % |  | 887 |  |  | (232) |  |  | (26) | %
Swap fees | 166 |  |  | 102 |  |  | 64 |  |  | 63 | % |  | 43 |  |  | 123 |  |  | 286 | %
Miscellaneous income | 1,175 |  |  | 721 |  |  | 454 |  |  | 63 | % |  | 1,272 |  |  | (97) |  |  | (8) | %
Total other income | $ | 3,044 |  |  | $ | 2,212 |  |  | $ | 832 |  |  | 38 | % |  | $ | 4,015 |  |  | $ | (971) |  |  | (24) | %

Community development and private equity distributions included in other income are not consistent sources of income and fluctuate based on distributions from the underlying funds. Servicing fee income may also fluctuate based on prepayment experience and changes to the discount rate used in the valuation of the servicing rights. Mortgage banking revenue has declined since the prior year quarter due to higher interest rates that have reduced sales volume.

| Linked quarter comparison |  | Prior year comparison
| Quarter ended |  | Quarter ended
($ in thousands) | September 30, 2022 |  | June 30, 2022 |  | Increase (decrease) |  | September 30, 2021 |  | Increase (decrease)
Employee compensation and benefits | $ | 36,999 |  |  | $ | 36,028 |  |  | $ | 971 |  |  | 3 | % |  | $ | 33,722 |  |  | $ | 3,277 |  |  | 10 | %
Occupancy | 4,497 |  |  | 4,309 |  |  | 188 |  |  | 4 | % |  | 4,496 |  |  | 1 |  |  | — | %
Branch closure expenses | — |  |  | — |  |  | — |  |  | — | % |  | 3,441 |  |  | (3,441) |  |  | (100) | %
Merger-related expenses | — |  |  | — |  |  | — |  |  | — | % |  | 14,671 |  |  | (14,671) |  |  | (100) | %
Other expense | 27,347 |  |  | 25,087 |  |  | 2,260 |  |  | 9 | % |  | 20,555 |  |  | 6,792 |  |  | 33 | %
Total noninterest expense | $ | 68,843 |  |  | $ | 65,424 |  |  | $ | 3,419 |  |  | 5 | % |  | $ | 76,885 |  |  | $ | (8,042) |  |  | (10) | %

7

Noninterest expense was $68.8 million for the third quarter 2022, compared to $65.4 million for the linked quarter, and $76.9 million for the prior year quarter. Employee compensation and benefits increased $1.0 million from the linked quarter due to an increase in full-time equivalent associates and higher performance-based incentive accruals. Other expense increased $2.3 million from the linked quarter primarily due to a $1.8 million increase in variable deposit costs in certain of the Company’s specialized deposit businesses that are impacted by higher interest rates. The decrease in noninterest expense of $8.0 million from the prior year quarter was primarily due to the merger costs from the First Choice acquisition and branch closure expenses recognized in the prior year quarter, offset by merit increases throughout 2021 and 2022 and an increase in variable deposit costs due to higher average balances and interest-rate trends.
For the third quarter 2022, the Company’s efficiency ratio was 51.5%, compared to 52.8% and 66.9% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio 4 was 51.5% for the quarter ended September 30, 2022, compared to 52.8% for the linked quarter and 51.3% for the prior year quarter.
4 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.
Income Taxes
The Company’s effective tax rate was 22% for both the quarter ended September 30, 2022 and June 30, 2022, compared to 24% for the prior year quarter. The Company’s effective tax rate in the prior year quarter was higher due to certain non-deductible merger expenses.
Capital
The following table presents total equity and various EFSC capital ratios for the most recent five quarters:

| Quarter ended
Percent | September 30, 2022 |  | June 30, 2022 |  | March 31, 2022 |  | December 31, 2021 |  | September 30, 2021
Shareholders’ equity | $ | 1,446,218 |  |  | $ | 1,447,412 |  |  | $ | 1,473,177 |  |  | $ | 1,529,116 |  |  | $ | 1,439,635 |
Total risk-based capital to risk-weighted assets | 14.2 | % |  | 14.2 | % |  | 14.4 | % |  | 14.7 | % |  | 14.5 | %
Tier 1 capital to risk weighted assets | 12.6 | % |  | 12.5 | % |  | 12.7 | % |  | 13.0 | % |  | 12.2 | %
Common equity tier 1 capital to risk-weighted assets | 11.0 | % |  | 10.9 | % |  | 11.0 | % |  | 11.3 | % |  | 11.2 | %
Tangible common equity to tangible assets | 7.9 | % |  | 7.8 | % |  | 7.6 | % |  | 8.1 | % |  | 8.4 | %
Leverage ratio | 10.4 | % |  | 9.8 | % |  | 9.6 | % |  | 9.7 | % |  | 9.7 | %

Total equity was $1.4 billion at September 30, 2022, a decrease of $1.2 million from the linked quarter. The decrease from the linked quarter was primarily due to a $44.7 million decline in accumulated other comprehensive income and $9.5 million in common and preferred dividends. These decreases were partially offset by current period net income of $50.2 million. The decline in accumulated other comprehensive income was due to a net fair value decline in the Company’s fixed-rate, available-for-sale investment portfolio from an increase in interest rates during the period. The Company’s tangible common book value per share was $26.62 at September 30, 2022, compared to $26.63 and $27.38 in the linked and prior year quarters, respectively.
The Company’s regulatory capital ratios continue to exceed the “well-capitalized” regulatory benchmark. 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 tangible common equity, PPNR, PPNR return on average assets (“PPNR ROAA”), financial metrics adjusted for PPP impact, core efficiency ratio, 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
8

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 tangible common equity, PPNR, PPNR ROAA, financial metrics adjusted for PPP impact, core efficiency ratio, and the tangible common equity ratio, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as merger-related expenses, facilities charges, and the gain or loss on sale of investment securities, that 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 10:00 a.m. Central Time on Tuesday, October 25, 2022. During the call, management will review the third quarter 2022 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” prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-888-550-5279 (Conference ID #7004515). A recorded replay of the conference call will be available on the website approximately two hours after the call’s completion. Visit https://bit.ly/EFSC3Q2022 to register. The replay will be available for approximately two weeks following the conference call.
About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.0 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 branch offices in Arizona, California, Kansas, Missouri, Nevada, and New Mexico, and SBA loan and deposit production offices throughout the country. 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.
9

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 are 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 First Choice acquisition and other acquisitions.
Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions, including the First Choice 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 and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), U.S. fiscal debt, budget and tax matters, and any slowdown in global economic growth, 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 legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, changes in the method of determining LIBOR and the phase out of LIBOR, natural disasters, terrorist activities, war and geopolitical matters (including the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, including the COVID-19 pandemic, and their effects on economic and business environments in which we operate, including the ongoing disruption to the financial market and other economic activity caused by the continuing COVID-19 pandemic, and those factors and risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.
For any forward-looking statements made in this press release or in any documents, EFSC claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Readers are cautioned not to place undue reliance on any forward-looking statements. Except to the extent required by applicable law or regulation, EFSC disclaims any obligation to revise or publicly release any revision or update to any of the forward-looking statements included herein to reflect events or circumstances that occur after the date on which such statements were made.
For more information contact
Investor Relations: Keene Turner, Executive Vice President and CFO (314) 512-7233
Media: Steve Richardson, Senior Vice President (314) 995-5695
10

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)

| Quarter ended |  | Nine months ended
(in thousands, except per share data) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021 |  | Sep 30, 2022 |  | Sep 30, 2021
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 124,290 |  |  | $ | 109,613 |  |  | $ | 101,165 |  |  | $ | 102,060 |  |  | $ | 97,273 |  |  | $ | 335,068 |  |  | $ | 258,134 |
Provision (benefit) for credit losses | 676 |  |  | 658 |  |  | (4,068) |  |  | (3,660) |  |  | 19,668 |  |  | (2,734) |  |  | 17,045 |
Noninterest income | 9,454 |  |  | 14,194 |  |  | 18,641 |  |  | 22,630 |  |  | 17,619 |  |  | 42,289 |  |  | 45,113 |
Noninterest expense | 68,843 |  |  | 65,424 |  |  | 62,800 |  |  | 63,694 |  |  | 76,885 |  |  | 197,067 |  |  | 182,225 |
Income before income tax expense | 64,225 |  |  | 57,725 |  |  | 61,074 |  |  | 64,656 |  |  | 18,339 |  |  | 183,024 |  |  | 103,977 |
Income tax expense | 14,025 |  |  | 12,576 |  |  | 13,381 |  |  | 13,845 |  |  | 4,426 |  |  | 39,982 |  |  | 21,733 |
Net income | 50,200 |  |  | 45,149 |  |  | 47,693 |  |  | 50,811 |  |  | 13,913 |  |  | 143,042 |  |  | 82,244 |
Preferred stock dividends | 937 |  |  | 938 |  |  | 1,229 |  |  | — |  |  | — |  |  | 3,104 |  |  | — |
Net income available to common shareholders | $ | 49,263 |  |  | $ | 44,211 |  |  | $ | 46,464 |  |  | $ | 50,811 |  |  | $ | 13,913 |  |  | $ | 139,938 |  |  | $ | 82,244 |
Diluted earnings per common share | $ | 1.32 |  |  | $ | 1.19 |  |  | $ | 1.23 |  |  | $ | 1.33 |  |  | $ | 0.38 |  |  | $ | 3.73 |  |  | $ | 2.48 |
Return on average assets | 1.51 | % |  | 1.34 | % |  | 1.42 | % |  | 1.52 | % |  | 0.45 | % |  | 1.42 | % |  | 1.01 | %
Return on average common equity | 13.74 | % |  | 12.65 | % |  | 12.87 | % |  | 13.81 | % |  | 3.96 | % |  | 13.09 | % |  | 9.14 | %
Return on average tangible common equity 1 | 18.82 | % |  | 17.44 | % |  | 17.49 | % |  | 18.81 | % |  | 5.37 | % |  | 17.92 | % |  | 12.31 | %
Net interest margin (tax equivalent) | 4.10 | % |  | 3.55 | % |  | 3.28 | % |  | 3.32 | % |  | 3.40 | % |  | 3.64 | % |  | 3.45 | %
Efficiency ratio | 51.47 | % |  | 52.84 | % |  | 52.42 | % |  | 51.08 | % |  | 66.92 | % |  | 52.22 | % |  | 60.09 | %
Core efficiency ratio 1 | 51.47 | % |  | 52.81 | % |  | 52.43 | % |  | 49.22 | % |  | 51.30 | % |  | 52.21 | % |  | 52.59 | %
Loans | $ | 9,354,987 |  |  | $ | 9,269,176 |  |  | $ | 9,056,073 |  |  | $ | 9,017,642 |  |  | $ | 9,116,583 |  |  |  |  |
Average loans | $ | 9,230,738 |  |  | $ | 9,109,131 |  |  | $ | 9,005,875 |  |  | $ | 9,030,982 |  |  | $ | 8,666,353 |  |  | $ | 9,116,072 |  |  | $ | 7,727,265 |
Assets | $ | 12,994,787 |  |  | $ | 13,084,506 |  |  | $ | 13,706,769 |  |  | $ | 13,537,358 |  |  | $ | 12,888,016 |  |  |  |  |
Average assets | $ | 13,158,121 |  |  | $ | 13,528,474 |  |  | $ | 13,614,003 |  |  | $ | 13,267,193 |  |  | $ | 12,334,558 |  |  | $ | 13,431,863 |  |  | $ | 10,860,756 |
Deposits | $ | 11,057,594 |  |  | $ | 11,092,618 |  |  | $ | 11,704,135 |  |  | $ | 11,343,799 |  |  | $ | 10,827,775 |  |  |  |  |
Average deposits | $ | 11,154,895 |  |  | $ | 11,530,432 |  |  | $ | 11,494,212 |  |  | $ | 11,167,003 |  |  | $ | 10,297,153 |  |  | $ | 11,391,937 |  |  | $ | 9,035,902 |
Period end common shares outstanding | 37,223 |  |  | 37,206 |  |  | 37,516 |  |  | 37,820 |  |  | 38,372 |  |  |  |  |
Dividends per common share | $ | 0.23 |  |  | $ | 0.22 |  |  | $ | 0.21 |  |  | $ | 0.20 |  |  | $ | 0.19 |  |  | $ | 0.66 |  |  | $ | 0.55 |
Tangible book value per common share | $ | 26.62 |  |  | $ | 26.63 |  |  | $ | 27.06 |  |  | $ | 28.28 |  |  | $ | 27.38 |  |  |  |  |
Tangible common equity to tangible assets 1 | 7.86 | % |  | 7.80 | % |  | 7.62 | % |  | 8.13 | % |  | 8.40 | % |  |  |  |
Total risk-based capital to risk-weighted assets | 14.2 | % |  | 14.2 | % |  | 14.4 | % |  | 14.7 | % |  | 14.5 | % |  |  |  |
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

11

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

| Quarter ended |  | Nine months ended
($ in thousands, except per share data) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021 |  | Sep 30, 2022 |  | Sep 30, 2021
INCOME STATEMENTS |  |  |  |  |  |  |  |  |  |  |  |  |
NET INTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income | $ | 135,695 |  |  | $ | 116,069 |  |  | $ | 106,581 |  |  | $ | 107,641 |  |  | $ | 103,228 |  |  | $ | 358,345 |  |  | $ | 275,589 |
Interest expense | 11,405 |  |  | 6,456 |  |  | 5,416 |  |  | 5,581 |  |  | 5,955 |  |  | 23,277 |  |  | 17,455 |
Net interest income | 124,290 |  |  | 109,613 |  |  | 101,165 |  |  | 102,060 |  |  | 97,273 |  |  | 335,068 |  |  | 258,134 |
Provision (benefit) for credit losses | 676 |  |  | 658 |  |  | (4,068) |  |  | (3,660) |  |  | 19,668 |  |  | (2,734) |  |  | 17,045 |
Net interest income after provision (benefit) for credit losses | 123,614 |  |  | 108,955 |  |  | 105,233 |  |  | 105,720 |  |  | 77,605 |  |  | 337,802 |  |  | 241,089 |
NONINTEREST INCOME |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit service charges | 4,951 |  |  | 4,749 |  |  | 4,163 |  |  | 3,962 |  |  | 4,520 |  |  | 13,863 |  |  | 11,466 |
Wealth management revenue | 2,432 |  |  | 2,533 |  |  | 2,622 |  |  | 2,687 |  |  | 2,573 |  |  | 7,587 |  |  | 7,572 |
Card services revenue | 2,652 |  |  | 3,514 |  |  | 3,040 |  |  | 3,223 |  |  | 3,186 |  |  | 9,206 |  |  | 8,657 |
Tax credit income (loss) | (3,625) |  |  | 1,186 |  |  | 2,608 |  |  | 4,374 |  |  | 3,325 |  |  | 169 |  |  | 3,654 |
Other income | 3,044 |  |  | 2,212 |  |  | 6,208 |  |  | 8,384 |  |  | 4,015 |  |  | 11,464 |  |  | 13,764 |
Total noninterest income | 9,454 |  |  | 14,194 |  |  | 18,641 |  |  | 22,630 |  |  | 17,619 |  |  | 42,289 |  |  | 45,113 |
NONINTEREST EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation and benefits | 36,999 |  |  | 36,028 |  |  | 35,827 |  |  | 33,488 |  |  | 33,722 |  |  | 108,854 |  |  | 91,416 |
Occupancy | 4,497 |  |  | 4,309 |  |  | 4,586 |  |  | 4,510 |  |  | 4,496 |  |  | 13,392 |  |  | 11,776 |
Branch closure expenses | — |  |  | — |  |  | — |  |  | — |  |  | 3,441 |  |  | — |  |  | 3,441 |
Merger-related expenses | — |  |  | — |  |  | — |  |  | 2,320 |  |  | 14,671 |  |  | — |  |  | 19,762 |
Other expense | 27,347 |  |  | 25,087 |  |  | 22,387 |  |  | 23,376 |  |  | 20,555 |  |  | 74,821 |  |  | 55,830 |
Total noninterest expense | 68,843 |  |  | 65,424 |  |  | 62,800 |  |  | 63,694 |  |  | 76,885 |  |  | 197,067 |  |  | 182,225 |
Income before income tax expense | 64,225 |  |  | 57,725 |  |  | 61,074 |  |  | 64,656 |  |  | 18,339 |  |  | 183,024 |  |  | 103,977 |
Income tax expense | 14,025 |  |  | 12,576 |  |  | 13,381 |  |  | 13,845 |  |  | 4,426 |  |  | 39,982 |  |  | 21,733 |
Net income | $ | 50,200 |  |  | $ | 45,149 |  |  | $ | 47,693 |  |  | $ | 50,811 |  |  | $ | 13,913 |  |  | $ | 143,042 |  |  | $ | 82,244 |
Preferred stock dividends | 937 |  |  | 938 |  |  | 1,229 |  |  | — |  |  | — |  |  | 3,104 |  |  | — |
Net income available to common shareholders | $ | 49,263 |  |  | $ | 44,211 |  |  | $ | 46,464 |  |  | $ | 50,811 |  |  | $ | 13,913 |  |  | $ | 139,938 |  |  | $ | 82,244 |
Basic earnings per common share | $ | 1.32 |  |  | $ | 1.19 |  |  | $ | 1.23 |  |  | $ | 1.33 |  |  | $ | 0.38 |  |  | $ | 3.74 |  |  | $ | 2.48 |
Diluted earnings per common share | $ | 1.32 |  |  | $ | 1.19 |  |  | $ | 1.23 |  |  | $ | 1.33 |  |  | $ | 0.38 |  |  | $ | 3.73 |  |  | $ | 2.48 |

12

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

| Quarter ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
BALANCE SHEETS |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 264,078 |  |  | $ | 271,763 |  |  | $ | 252,706 |  |  | $ | 209,177 |  |  | $ | 179,826 |
Interest-earning deposits | 489,825 |  |  | 680,343 |  |  | 1,735,708 |  |  | 1,819,508 |  |  | 1,216,470 |
Debt and equity investments | 2,171,942 |  |  | 2,172,318 |  |  | 1,993,927 |  |  | 1,855,583 |  |  | 1,717,442 |
Loans held for sale | 785 |  |  | 4,615 |  |  | 4,270 |  |  | 6,389 |  |  | 5,068 |
Loans | 9,354,987 |  |  | 9,269,176 |  |  | 9,056,073 |  |  | 9,017,642 |  |  | 9,116,583 |
Allowance for credit losses | (140,572) |  |  | (140,546) |  |  | (139,212) |  |  | (145,041) |  |  | (152,096) |
Total loans, net | 9,214,415 |  |  | 9,128,630 |  |  | 8,916,861 |  |  | 8,872,601 |  |  | 8,964,487 |
Fixed assets, net | 43,882 |  |  | 46,028 |  |  | 46,900 |  |  | 47,915 |  |  | 48,697 |
Goodwill | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,415 |
Intangible assets, net | 18,217 |  |  | 19,528 |  |  | 20,855 |  |  | 22,286 |  |  | 23,777 |
Other assets | 426,479 |  |  | 396,117 |  |  | 370,378 |  |  | 338,735 |  |  | 366,834 |
Total assets | $ | 12,994,787 |  |  | $ | 13,084,506 |  |  | $ | 13,706,769 |  |  | $ | 13,537,358 |  |  | $ | 12,888,016 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |
Noninterest-bearing deposits | $ | 4,642,539 |  |  | $ | 4,746,478 |  |  | $ | 4,881,043 |  |  | $ | 4,578,436 |  |  | $ | 4,375,713 |
Interest-bearing deposits | 6,415,055 |  |  | 6,346,140 |  |  | 6,823,092 |  |  | 6,765,363 |  |  | 6,452,062 |
Total deposits | 11,057,594 |  |  | 11,092,618 |  |  | 11,704,135 |  |  | 11,343,799 |  |  | 10,827,775 |
Subordinated debentures | 155,298 |  |  | 155,164 |  |  | 155,031 |  |  | 154,899 |  |  | 204,103 |
FHLB advances | — |  |  | 50,000 |  |  | 50,000 |  |  | 50,000 |  |  | 50,000 |
Other borrowings | 197,422 |  |  | 226,695 |  |  | 228,846 |  |  | 353,863 |  |  | 243,770 |
Other liabilities | 138,255 |  |  | 112,617 |  |  | 95,580 |  |  | 105,681 |  |  | 122,733 |
Total liabilities | 11,548,569 |  |  | 11,637,094 |  |  | 12,233,592 |  |  | 12,008,242 |  |  | 11,448,381 |
Shareholders’ equity: |  |  |  |  |  |  |  |  |
Preferred stock | 71,988 |  |  | 71,988 |  |  | 71,988 |  |  | 71,988 |  |  | — |
Common stock | 372 |  |  | 372 |  |  | 395 |  |  | 398 |  |  | 404 |
Treasury stock | — |  |  | — |  |  | (73,528) |  |  | (73,528) |  |  | (73,528) |
Additional paid-in capital | 979,543 |  |  | 976,684 |  |  | 1,010,446 |  |  | 1,018,799 |  |  | 1,031,146 |
Retained earnings | 547,506 |  |  | 506,849 |  |  | 523,136 |  |  | 492,682 |  |  | 461,711 |
Accumulated other comprehensive income (loss) | (153,191) |  |  | (108,481) |  |  | (59,260) |  |  | 18,777 |  |  | 19,902 |
Total shareholders’ equity | 1,446,218 |  |  | 1,447,412 |  |  | 1,473,177 |  |  | 1,529,116 |  |  | 1,439,635 |
Total liabilities and shareholders’ equity | $ | 12,994,787 |  |  | $ | 13,084,506 |  |  | $ | 13,706,769 |  |  | $ | 13,537,358 |  |  | $ | 12,888,016 |

13

| Nine months ended
| September 30, 2022 |  | September 30, 2021
($ in thousands) | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate |  | Average Balance |  | Interest Income/ Expense |  | Average Yield/ Rate
Assets |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |
Loans 1, 2 | $ | 9,116,072 |  |  | $ | 317,271 |  |  | 4.65 | % |  | $ | 7,727,264 |  |  | $ | 250,699 |  |  | 4.34 | %
Securities 2 | 2,065,800 |  |  | 38,631 |  |  | 2.50 |  |  | 1,505,592 |  |  | 27,627 |  |  | 2.45 |
Interest-earning deposits | 1,312,442 |  |  | 7,502 |  |  | 0.76 |  |  | 914,954 |  |  | 906 |  |  | 0.13 |
Total interest-earning assets | 12,494,314 |  |  | 363,404 |  |  | 3.89 |  |  | 10,147,810 |  |  | 279,232 |  |  | 3.68 |
Noninterest-earning assets | 937,549 |  |  |  |  |  |  | 712,946 |  |  |  |  |
Total assets | $ | 13,431,863 |  |  |  |  |  |  | $ | 10,860,756 |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-bearing demand accounts | $ | 2,344,007 |  |  | $ | 2,902 |  |  | 0.17 | % |  | $ | 2,035,029 |  |  | $ | 1,123 |  |  | 0.07 | %
Money market accounts | 2,810,278 |  |  | 9,797 |  |  | 0.47 |  |  | 2,458,146 |  |  | 3,257 |  |  | 0.18 |
Savings | 833,721 |  |  | 205 |  |  | 0.03 |  |  | 707,269 |  |  | 161 |  |  | 0.03 |
Certificates of deposit | 584,213 |  |  | 2,492 |  |  | 0.57 |  |  | 555,045 |  |  | 3,329 |  |  | 0.80 |
Total interest-bearing deposits | 6,572,219 |  |  | 15,396 |  |  | 0.31 |  |  | 5,755,489 |  |  | 7,870 |  |  | 0.18 |
Subordinated debentures | 155,093 |  |  | 6,790 |  |  | 5.85 |  |  | 203,853 |  |  | 8,521 |  |  | 5.59 |
FHLB advances | 41,758 |  |  | 495 |  |  | 1.58 |  |  | 63,297 |  |  | 603 |  |  | 1.27 |
Securities sold under agreements to repurchase | 220,703 |  |  | 224 |  |  | 0.14 |  |  | 218,942 |  |  | 176 |  |  | 0.11 |
Other borrowings | 21,402 |  |  | 372 |  |  | 2.32 |  |  | 27,154 |  |  | 285 |  |  | 1.40 |
Total interest-bearing liabilities | 7,011,175 |  |  | 23,277 |  |  | 0.44 |  |  | 6,268,735 |  |  | 17,455 |  |  | 0.37 |
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 4,819,718 |  |  |  |  |  |  | 3,280,414 |  |  |  |  |
Other liabilities | 99,458 |  |  |  |  |  |  | 108,001 |  |  |  |  |
Total liabilities | 11,930,351 |  |  |  |  |  |  | 9,657,150 |  |  |  |  |
Shareholders' equity | 1,501,512 |  |  |  |  |  |  | 1,203,606 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 13,431,863 |  |  |  |  |  |  | $ | 10,860,756 |  |  |  |  |
Total net interest income |  |  | $ | 340,127 |  |  |  |  |  |  | $ | 261,777 |  |  |
Net interest margin |  |  |  |  | 3.64 | % |  |  |  |  |  | 3.45 | %
1 Average balances include nonaccrual loans. Interest income includes loan fees of $13.0 million and $22.1 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.
2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $5.1 million and $3.6 million for the nine months ended September 30, 2022 and 2021, respectively.

14

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

| Quarter ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
LOAN PORTFOLIO |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 3,709,893 |  |  | $ | 3,596,701 |  |  | $ | 3,398,723 |  |  | $ | 3,392,375 |  |  | $ | 3,379,171 |
Commercial real estate | 4,438,647 |  |  | 4,294,375 |  |  | 4,278,138 |  |  | 4,176,928 |  |  | 4,179,712 |
Construction real estate | 583,649 |  |  | 724,163 |  |  | 702,630 |  |  | 734,073 |  |  | 747,758 |
Residential real estate | 397,450 |  |  | 413,727 |  |  | 432,639 |  |  | 454,052 |  |  | 542,690 |
Other | 225,348 |  |  | 240,210 |  |  | 243,943 |  |  | 260,214 |  |  | 267,252 |
Total loans | $ | 9,354,987 |  |  | $ | 9,269,176 |  |  | $ | 9,056,073 |  |  | $ | 9,017,642 |  |  | $ | 9,116,583 |
DEPOSIT PORTFOLIO |  |  |  |  |  |  |  |  |
Noninterest-bearing demand accounts | $ | 4,642,539 |  |  | $ | 4,746,478 |  |  | $ | 4,881,043 |  |  | $ | 4,578,436 |  |  | $ | 4,375,713 |
Interest-bearing demand accounts | 2,270,898 |  |  | 2,197,957 |  |  | 2,547,482 |  |  | 2,465,884 |  |  | 2,253,639 |
Money market and savings accounts | 3,617,249 |  |  | 3,562,982 |  |  | 3,678,135 |  |  | 3,691,186 |  |  | 3,571,252 |
Brokered certificates of deposit | 129,039 |  |  | 129,064 |  |  | 129,017 |  |  | 128,970 |  |  | 128,923 |
Other certificates of deposit | 397,869 |  |  | 456,137 |  |  | 468,458 |  |  | 479,323 |  |  | 498,248 |
Total deposits | $ | 11,057,594 |  |  | $ | 11,092,618 |  |  | $ | 11,704,135 |  |  | $ | 11,343,799 |  |  | $ | 10,827,775 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |
Loans | $ | 9,230,738 |  |  | $ | 9,109,131 |  |  | $ | 9,005,875 |  |  | $ | 9,030,982 |  |  | $ | 8,666,353 |
Securities | 2,202,255 |  |  | 2,068,119 |  |  | 1,923,969 |  |  | 1,753,159 |  |  | 1,594,938 |
Interest-earning assets | 12,198,251 |  |  | 12,579,211 |  |  | 12,711,116 |  |  | 12,373,149 |  |  | 11,513,279 |
Assets | 13,158,121 |  |  | 13,528,474 |  |  | 13,614,003 |  |  | 13,267,193 |  |  | 12,334,558 |
Deposits | 11,154,895 |  |  | 11,530,432 |  |  | 11,494,212 |  |  | 11,167,003 |  |  | 10,297,153 |
Shareholders’ equity | 1,494,504 |  |  | 1,474,267 |  |  | 1,536,221 |  |  | 1,495,396 |  |  | 1,394,096 |
Tangible common equity 1 | 1,038,495 |  |  | 1,016,940 |  |  | 1,077,529 |  |  | 1,071,902 |  |  | 1,028,001 |
YIELDS (tax equivalent) |  |  |  |  |  |  |  |  |
Loans | 5.10 | % |  | 4.51 | % |  | 4.34 | % |  | 4.32 | % |  | 4.32 | %
Securities | 2.65 |  |  | 2.51 |  |  | 2.31 |  |  | 2.30 |  |  | 2.38 |
Interest-earning assets | 4.47 |  |  | 3.76 |  |  | 3.45 |  |  | 3.50 |  |  | 3.60 |
Interest-bearing deposits | 0.54 |  |  | 0.24 |  |  | 0.17 |  |  | 0.17 |  |  | 0.17 |
Deposits | 0.31 |  |  | 0.13 |  |  | 0.10 |  |  | 0.10 |  |  | 0.11 |
Subordinated debentures | 5.91 |  |  | 5.84 |  |  | 5.81 |  |  | 5.64 |  |  | 5.55 |
FHLB advances and other borrowed funds | 0.66 |  |  | 0.51 |  |  | 0.41 |  |  | 0.43 |  |  | 0.43 |
Interest-bearing liabilities | 0.67 |  |  | 0.37 |  |  | 0.30 |  |  | 0.31 |  |  | 0.35 |
Net interest margin | 4.10 |  |  | 3.55 |  |  | 3.28 |  |  | 3.32 |  |  | 3.40 |

1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.
15

PPP details:

| Quarter ended
($ in thousands, except per share data) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
PPP loans outstanding, net of deferred fees | $ | 13,165 |  |  | $ | 49,175 |  |  | $ | 134,084 |  |  | $ | 271,958 |  |  | $ | 438,959 |
Average PPP loans outstanding, net | 26,113 |  |  | 89,152 |  |  | 194,382 |  |  | 365,295 |  |  | 489,104 |
PPP interest and fee income recognized | 471 |  |  | 1,557 |  |  | 2,858 |  |  | 4,864 |  |  | 6,048 |
PPP deferred fees remaining | 119 |  |  | 524 |  |  | 1,851 |  |  | 4,215 |  |  | 7,428 |
PPP average yield | 7.16 | % |  | 7.01 | % |  | 5.96 | % |  | 5.28 | % |  | 4.91 | %

| Quarter ended
| Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
Financial Metrics: | As Reported |  | Excluding PPP* |  | As Reported |  | Excluding PPP* |  | As Reported |  | Excluding PPP* |  | As Reported |  | Excluding PPP* |  | As Reported |  | Excluding PPP*
EPS | $ | 1.32 |  |  | $ | 1.31 |  |  | $ | 1.19 |  |  | $ | 1.15 |  |  | $ | 1.23 |  |  | $ | 1.17 |  |  | $ | 1.33 |  |  | $ | 1.23 |  |  | $ | 0.38 |  |  | $ | 0.25 |
ROAA | 1.51 | % |  | 1.51 | % |  | 1.34 | % |  | 1.31 | % |  | 1.42 | % |  | 1.38 | % |  | 1.52 | % |  | 1.45 | % |  | 0.45 | % |  | 0.31 | %
PPNR ROAA* | 1.96 | % |  | 1.95 | % |  | 1.73 | % |  | 1.70 | % |  | 1.70 | % |  | 1.64 | % |  | 1.89 | % |  | 1.80 | % |  | 1.81 | % |  | 1.68 | %
Tangible common equity/tangible assets* | 7.86 | % |  | 7.86 | % |  | 7.80 | % |  | 7.83 | % |  | 7.62 | % |  | 7.70 | % |  | 8.13 | % |  | 8.31 | % |  | 8.40 | % |  | 8.71 | %
Leverage ratio | 10.4 | % |  | 10.4 | % |  | 9.8 | % |  | 9.8 | % |  | 9.6 | % |  | 9.7 | % |  | 9.7 | % |  | 10.0 | % |  | 9.7 | % |  | 10.2 | %
NIM | 4.10 | % |  | 4.10 | % |  | 3.55 | % |  | 3.52 | % |  | 3.28 | % |  | 3.23 | % |  | 3.32 | % |  | 3.26 | % |  | 3.40 | % |  | 3.33 | %
Allowance for credit losses/loans | 1.50 | % |  | 1.67 | % |  | 1.52 | % |  | 1.69 | % |  | 1.54 | % |  | 1.73 | % |  | 1.61 | % |  | 1.84 | % |  | 1.67 | % |  | 1.94 | %
* Non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables. Calculations not adjusted for increase in average deposits or increase in deposit expense, as applicable. The ratio of allowance for credit losses to loans excludes all guaranteed loans, including PPP loans.

16

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

| Quarter ended
(in thousands, except per share data) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
ASSET QUALITY |  |  |  |  |  |  |  |  |
Net charge-offs (recoveries) | $ | 478 |  |  | $ | (175) |  |  | $ | 1,521 |  |  | $ | 3,263 |  |  | $ | 1,850 |
Nonperforming loans | 18,184 |  |  | 19,560 |  |  | 21,160 |  |  | 28,024 |  |  | 41,554 |
Classified assets | 98,078 |  |  | 96,801 |  |  | 93,199 |  |  | 100,797 |  |  | 104,220 |
Nonperforming loans to total loans | 0.19 | % |  | 0.21 | % |  | 0.23 | % |  | 0.31 | % |  | 0.46 | %
Nonperforming assets to total assets | 0.14 | % |  | 0.16 | % |  | 0.17 | % |  | 0.23 | % |  | 0.35 | %
Allowance for credit losses to total loans | 1.50 | % |  | 1.52 | % |  | 1.54 | % |  | 1.61 | % |  | 1.67 | %
Allowance for credit losses to nonperforming loans | 773.1 | % |  | 718.5 | % |  | 657.9 | % |  | 517.6 | % |  | 366.0 | %
Net charge-offs (recoveries) to average loans -annualized | 0.02 | % |  | (0.01) | % |  | 0.07 | % |  | 0.14 | % |  | 0.08 | %
WEALTH MANAGEMENT |  |  |  |  |  |  |  |  |
Trust assets under management | $ | 1,691,230 |  |  | $ | 1,757,228 |  |  | $ | 1,943,428 |  |  | $ | 2,083,543 |  |  | $ | 2,017,178 |
Trust assets under administration | 2,138,636 |  |  | 2,184,019 |  |  | 2,400,679 |  |  | 2,556,266 |  |  | 2,486,152 |
MARKET DATA |  |  |  |  |  |  |  |  |
Book value per common share | $ | 36.92 |  |  | $ | 36.97 |  |  | $ | 37.35 |  |  | $ | 38.53 |  |  | $ | 37.52 |
Tangible book value per common share 1 | $ | 26.62 |  |  | $ | 26.63 |  |  | $ | 27.06 |  |  | $ | 28.28 |  |  | $ | 27.38 |
Market value per share | $ | 44.04 |  |  | $ | 41.50 |  |  | $ | 47.31 |  |  | $ | 47.09 |  |  | $ | 45.28 |
Period end common shares outstanding | 37,223 |  |  | 37,206 |  |  | 37,516 |  |  | 37,820 |  |  | 38,372 |
Average basic common shares | 37,241 |  |  | 37,243 |  |  | 37,788 |  |  | 38,228 |  |  | 36,878 |
Average diluted common shares | 37,348 |  |  | 37,282 |  |  | 37,858 |  |  | 38,311 |  |  | 36,946 |
CAPITAL |  |  |  |  |  |  |  |  |
Total risk-based capital to risk-weighted assets | 14.2 | % |  | 14.2 | % |  | 14.4 | % |  | 14.7 | % |  | 14.5 | %
Tier 1 capital to risk-weighted assets | 12.6 | % |  | 12.5 | % |  | 12.7 | % |  | 13.0 | % |  | 12.2 | %
Common equity tier 1 capital to risk-weighted assets | 11.0 | % |  | 10.9 | % |  | 11.0 | % |  | 11.3 | % |  | 11.2 | %
Tangible common equity to tangible assets 1 | 7.9 | % |  | 7.8 | % |  | 7.6 | % |  | 8.1 | % |  | 8.4 | %
1 Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

17

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

| Quarter ended |  | Nine months ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021 |  | Sep 30, 2022 |  | Sep 30, 2021
CORE PERFORMANCE MEASURES |  |  |  |
Net interest income | $ | 124,290 |  |  | $ | 109,613 |  |  | $ | 101,165 |  |  | $ | 102,060 |  |  | $ | 97,273 |  |  | $ | 335,068 |  |  | $ | 258,134 |
Noninterest income | 9,454 |  |  | 14,194 |  |  | 18,641 |  |  | 22,630 |  |  | 17,619 |  |  | 42,289 |  |  | 45,113 |
Less gain (loss) on sale of other real estate owned | (22) |  |  | (90) |  |  | 19 |  |  | — |  |  | 335 |  |  | (93) |  |  | 884 |
Total core revenue | 133,766 |  |  | 123,897 |  |  | 119,787 |  |  | 124,690 |  |  | 114,557 |  |  | 377,450 |  |  | 302,363 |
Noninterest expense | 68,843 |  |  | 65,424 |  |  | 62,800 |  |  | 63,694 |  |  | 76,885 |  |  | 197,067 |  |  | 182,225 |
Less branch closure expenses | — |  |  | — |  |  | — |  |  | — |  |  | 3,441 |  |  | — |  |  | 3,441 |
Less merger-related expenses | — |  |  | — |  |  | — |  |  | 2,320 |  |  | 14,671 |  |  | — |  |  | 19,762 |
Core noninterest expense | 68,843 |  |  | 65,424 |  |  | 62,800 |  |  | 61,374 |  |  | 58,773 |  |  | 197,067 |  |  | 159,022 |
Core efficiency ratio | 51.47 | % |  | 52.81 | % |  | 52.43 | % |  | 49.22 | % |  | 51.30 | % |  | 52.21 | % |  | 52.59 | %

| Quarter ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity | $ | 1,446,218 |  |  | $ | 1,447,412 |  |  | $ | 1,473,177 |  |  | $ | 1,529,116 |  |  | $ | 1,439,635 |
Less preferred stock | 71,988 |  |  | 71,988 |  |  | 71,988 |  |  | 71,988 |  |  | — |
Less goodwill | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,415 |
Less intangible assets | 18,217 |  |  | 19,528 |  |  | 20,855 |  |  | 22,286 |  |  | 23,777 |
Tangible common equity | $ | 990,849 |  |  | $ | 990,732 |  |  | $ | 1,015,170 |  |  | $ | 1,069,678 |  |  | $ | 1,050,443 |
Total assets | $ | 12,994,787 |  |  | $ | 13,084,506 |  |  | $ | 13,706,769 |  |  | $ | 13,537,358 |  |  | $ | 12,888,016 |
Less goodwill | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,164 |  |  | 365,415 |
Less intangible assets | 18,217 |  |  | 19,528 |  |  | 20,855 |  |  | 22,286 |  |  | 23,777 |
Tangible assets | $ | 12,611,406 |  |  | $ | 12,699,814 |  |  | $ | 13,320,750 |  |  | $ | 13,149,908 |  |  | $ | 12,498,824 |
Tangible common equity to tangible assets | 7.86 | % |  | 7.80 | % |  | 7.62 | % |  | 8.13 | % |  | 8.40 | %

| Quarter Ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Sep 30, 2021
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity | $ | 1,494,504 |  |  | $ | 1,474,267 |  |  | $ | 1,394,096 |
Less average preferred stock | 71,988 |  |  | 71,988 |  |  | — |
Less average goodwill | 365,164 |  |  | 365,164 |  |  | 342,622 |
Less average intangible assets | 18,857 |  |  | 20,175 |  |  | 23,473 |
Average tangible common equity | $ | 1,038,495 |  |  | $ | 1,016,940 |  |  | $ | 1,028,001 |
Net income available to common shareholders | $ | 49,263 |  |  | $ | 44,211 |  |  | $ | 13,913 |
Return on average tangible common equity | 18.82 | % |  | 17.44 | % |  | 5.37 | %

18

| Quarter ended |  | Nine months ended
($ in thousands) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021 |  | Sep 30, 2022 |  | Sep 30, 2021
CALCULATION OF PRE-PROVISION NET REVENUE |  |  |  |
Net interest income | $ | 124,290 |  |  | $ | 109,613 |  |  | $ | 101,165 |  |  | $ | 102,060 |  |  | $ | 97,273 |  |  | $ | 335,068 |  |  | $ | 258,134 |
Noninterest income | 9,454 |  |  | 14,194 |  |  | 18,641 |  |  | 22,630 |  |  | 17,619 |  |  | 42,289 |  |  | 45,113 |
Less noninterest expense | 68,843 |  |  | 65,424 |  |  | 62,800 |  |  | 63,694 |  |  | 76,885 |  |  | 197,067 |  |  | 182,225 |
Branch closure expenses | — |  |  | — |  |  | — |  |  | — |  |  | 3,441 |  |  | — |  |  | 3,441 |
Merger-related expenses | — |  |  | — |  |  | — |  |  | 2,320 |  |  | 14,671 |  |  | — |  |  | 19,762 |
PPNR | $ | 64,901 |  |  | $ | 58,383 |  |  | $ | 57,006 |  |  | $ | 63,316 |  |  | $ | 56,119 |  |  | $ | 180,290 |  |  | $ | 144,225 |
Average assets | $ | 13,158,121 |  |  | $ | 13,528,474 |  |  | $ | 13,614,003 |  |  | $ | 13,267,193 |  |  | $ | 12,334,558 |  |  | $ | 13,431,863 |  |  | $ | 10,860,756 |
ROAA - GAAP net income | 1.51 | % |  | 1.34 | % |  | 1.42 | % |  | 1.52 | % |  | 0.45 | % |  | 1.42 | % |  | 1.01 | %
PPNR ROAA - PPNR | 1.96 | % |  | 1.73 | % |  | 1.70 | % |  | 1.89 | % |  | 1.81 | % |  | 1.79 | % |  | 1.78 | %

| Quarter Ended
($ in thousands, except per share data) | Sep 30, 2022 |  | Jun 30, 2022 |  | Mar 31, 2022 |  | Dec 31, 2021 |  | Sep 30, 2021
IMPACT OF PAYCHECK PROTECTION PROGRAM
Net income - GAAP | $ | 50,200 |  |  | $ | 45,149 |  |  | $ | 47,693 |  |  | $ | 50,811 |  |  | $ | 13,913 |
PPP interest and fee income | (471) |  |  | (1,557) |  |  | (2,858) |  |  | (4,864) |  |  | (6,048) |
Related tax effect | 119 |  |  | 392 |  |  | 720 |  |  | 1,226 |  |  | 1,506 |
Adjusted net income - Non-GAAP | $ | 49,848 |  |  | $ | 43,984 |  |  | $ | 45,555 |  |  | $ | 47,173 |  |  | $ | 9,371 |
Preferred stock dividends | 937 |  |  | 938 |  |  | 1,229 |  |  | — |  |  | — |
Adjusted net income available to common shareholders- Non-GAAP | $ | 48,911 |  |  | $ | 43,046 |  |  | $ | 44,326 |  |  | $ | 47,173 |  |  | $ | 9,371 |
Average diluted common shares | 37,348 |  |  | 37,282 |  |  | 37,858 |  |  | 38,311 |  |  | 36,946 |
EPS - GAAP net income available to common shareholders | $ | 1.32 |  |  | $ | 1.19 |  |  | $ | 1.23 |  |  | $ | 1.33 |  |  | $ | 0.38 |
EPS - Adjusted net income available to common shareholders | $ | 1.31 |  |  | $ | 1.15 |  |  | $ | 1.17 |  |  | $ | 1.23 |  |  | $ | 0.25 |
Average Assets - GAAP | $ | 13,158,121 |  |  | $ | 13,528,474 |  |  | $ | 13,614,003 |  |  | $ | 13,267,193 |  |  | $ | 12,334,558 |
Average PPP loans, net | (26,113) |  |  | (89,152) |  |  | (194,382) |  |  | (365,295) |  |  | (489,104) |
Adjusted average assets - Non-GAAP | $ | 13,132,008 |  |  | $ | 13,439,322 |  |  | $ | 13,419,621 |  |  | $ | 12,901,898 |  |  | $ | 11,845,454 |
ROAA - GAAP net income | 1.51 | % |  | 1.34 | % |  | 1.42 | % |  | 1.52 | % |  | 0.45 | %
ROAA - Adjusted net income, adjusted average assets | 1.51 | % |  | 1.31 | % |  | 1.38 | % |  | 1.45 | % |  | 0.31 | %
PPNR - Non-GAAP (see reconciliation above) | $ | 64,901 |  |  | $ | 58,383 |  |  | $ | 57,006 |  |  | $ | 63,316 |  |  | $ | 56,119 |
PPP interest and fee income | (471) |  |  | (1,557) |  |  | (2,858) |  |  | (4,864) |  |  | (6,048) |
Adjusted PPNR - Non-GAAP | $ | 64,430 |  |  | $ | 56,826 |  |  | $ | 54,148 |  |  | $ | 58,452 |  |  | $ | 50,071 |
PPNR ROAA - PPNR | 1.96 | % |  | 1.73 | % |  | 1.70 | % |  | 1.89 | % |  | 1.81 | %
PPNR ROAA - adjusted PPNR, adjusted average assets | 1.95 | % |  | 1.70 | % |  | 1.64 | % |  | 1.80 | % |  | 1.68 | %
Tangible assets - Non-GAAP (see reconciliation above) | $ | 12,611,406 |  |  | $ | 12,699,814 |  |  | $ | 13,320,750 |  |  | $ | 13,149,908 |  |  | $ | 12,498,824 |
PPP loans outstanding, net | (13,165) |  |  | (49,175) |  |  | (134,084) |  |  | (271,958) |  |  | (438,959) |
Adjusted tangible assets - Non-GAAP | $ | 12,598,241 |  |  | $ | 12,650,639 |  |  | $ | 13,186,666 |  |  | $ | 12,877,950 |  |  | $ | 12,059,865 |
Tangible common equity Non-GAAP (see reconciliation above) | $ | 990,849 |  |  | $ | 990,732 |  |  | $ | 1,015,170 |  |  | $ | 1,069,678 |  |  | $ | 1,050,443 |
Tangible common equity to tangible assets | 7.86 | % |  | 7.80 | % |  | 7.62 | % |  | 8.13 | % |  | 8.40 | %
Tangible common equity to tangible assets - adjusted tangible assets | 7.86 | % |  | 7.83 | % |  | 7.70 | % |  | 8.31 | % |  | 8.71 | %
Average assets for leverage ratio | $ | 12,918,632 |  |  | $ | 13,265,790 |  |  | $ | 13,273,520 |  |  | $ | 12,915,944 |  |  | $ | 11,972,171 |
Average PPP loans, net | (26,113) |  |  | (89,152) |  |  | (194,382) |  |  | (365,295) |  |  | (489,104) |
Adjusted average assets for leverage ratio - Non-GAAP | $ | 12,892,519 |  |  | $ | 13,176,638 |  |  | $ | 13,079,138 |  |  | $ | 12,550,649 |  |  | $ | 11,483,067 |

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Tier 1 capital | $ | 1,340,252 |  |  | $ | 1,295,791 |  |  | $ | 1,271,342 |  |  | $ | 1,257,462 |  |  | $ | 1,166,529 |
Leverage ratio | 10.4 | % |  | 9.8 | % |  | 9.6 | % |  | 9.7 | % |  | 9.7 | %
Leverage ratio - adjusted average assets for leverage ratio | 10.4 | % |  | 9.8 | % |  | 9.7 | % |  | 10.0 | % |  | 10.2 | %
Net interest income - tax equivalent | $ | 126,144 |  |  | $ | 111,312 |  |  | $ | 102,671 |  |  | $ | 103,567 |  |  | $ | 98,573 |
PPP interest and fee income | (471) |  |  | (1,557) |  |  | (2,858) |  |  | (4,864) |  |  | (6,048) |
Adjusted net interest income - tax equivalent | $ | 125,673 |  |  | $ | 109,755 |  |  | $ | 99,813 |  |  | $ | 98,703 |  |  | $ | 92,525 |
Average earning assets - GAAP | $ | 12,198,251 |  |  | $ | 12,579,211 |  |  | $ | 12,711,116 |  |  | $ | 12,373,149 |  |  | $ | 11,513,279 |
Average PPP loans, net | (26,113) |  |  | (89,152) |  |  | (194,382) |  |  | (365,295) |  |  | (489,104) |
Adjusted average earning assets - Non-GAAP | $ | 12,172,138 |  |  | $ | 12,490,059 |  |  | $ | 12,516,734 |  |  | $ | 12,007,854 |  |  | $ | 11,024,175 |
Net interest margin - tax equivalent | 4.10 | % |  | 3.55 | % |  | 3.28 | % |  | 3.32 | % |  | 3.40 | %
Net interest margin - tax equivalent - adjusted net interest income, adjusted average earning assets | 4.10 | % |  | 3.52 | % |  | 3.23 | % |  | 3.26 | % |  | 3.33 | %
Loans - GAAP | $ | 9,354,987 |  |  | $ | 9,269,176 |  |  | $ | 9,056,073 |  |  | $ | 9,017,642 |  |  | $ | 9,116,583 |
PPP and other guaranteed loans, net | (924,605) |  |  | (967,396) |  |  | (1,023,509) |  |  | (1,151,895) |  |  | (1,277,452) |
Adjusted loans - Non-GAAP | $ | 8,430,382 |  |  | $ | 8,301,780 |  |  | $ | 8,032,564 |  |  | $ | 7,865,747 |  |  | $ | 7,839,131 |
Allowance for credit losses | $ | 140,572 |  |  | $ | 140,546 |  |  | $ | 139,212 |  |  | $ | 145,041 |  |  | $ | 152,096 |
Allowance for credit losses/loans - GAAP | 1.50 | % |  | 1.52 | % |  | 1.54 | % |  | 1.61 | % |  | 1.67 | %
Allowance for credit losses/loans - adjusted loans | 1.67 | % |  | 1.69 | % |  | 1.73 | % |  | 1.84 | % |  | 1.94 | %

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