Enterprise Financial Services Corp (NASDAQ:EFSC) Q2 2022 Earnings Conference Call July 26, 2022 11:00 AM ET Company Participants Jim Lally - President and Chief Executive Officer Scott Goodman - President-Enterprise Bank & Trust Keene Turner - Chief Financial Officer and Chief Operating Officer Conference Call Participants Jeffrey Rulis - D.A. Davidson Andrew Liesch - Piper Sandler Brian Martin - Janney Montgomery Damon DelMonte - KBW Operator Good morning. My name is Rex and I will be your conference opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022. ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission file number 001-15373 ENTERPRISE FINANCIAL SERVICES CORP Incorporated in the State of Delaware I.R.S. Employer Identification # 43-1706259 Add ...

Enterprise Financial Services Corp (NASDAQ:EFSC) Q1 2022 Earnings Conference Call April 26, 2022 11:00 AM ET Company Participants Jim Lally - President & Chief Executive Officer Scott Goodman - President-Enterprise Bank & Trust Keene Turner - Chief Financial Officer & Chief Operating Officer\ Conference Call Participants Jeff Rulis - D.A. Davidson Andrew Liesch - Piper Sandler Damon DelMonte - KBW Brian Martin - Janney Montgomery Daniel Cardenas - Boenning & Scattergood Operator Good day. And welcome to the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-15373 ENTERPRISE FINANCIAL SERVICES CORP (Exact name of registrant as specified in its charter) Incorporat ...

Financial Data and Key Metrics Changes - The company reported net income of $51 million or $1.33 per diluted share for Q4 2021, showing improvement compared to previous quarters [5][6] - Return on average assets was 1.52% and pre-provision net revenue reached a record of $63 million, increasing by $7 million from Q3 [6][10] - The loan-to-deposit ratio improved to 80%, with total loans at $9 billion and total deposits at $11.3 billion [9][10] Business Line Data and Key Metrics Changes - Loans increased by 24.8% year-over-year, driven by the addition of the First Choice book and organic growth across core business lines [20] - Specialized lending units grew by 22% annualized, with significant contributions from sponsor finance and SBA teams [23][24] - Commercial real estate originations remained strong, although impacted by payoffs and pay-downs [26] Market Data and Key Metrics Changes - St. Louis had the largest C&I book, benefiting from improved line usage and new loan originations [27] - Arizona and Kansas City loan books also grew, with new commercial real estate opportunities being originated [28] - New Mexico's loan book saw a reduction mainly due to legacy transactions and a slower ramp-up of new originations [29] Company Strategy and Development Direction - The company focuses on diversifying revenue streams through geography and business types, with recent acquisitions enhancing its market presence [7][16] - A branch-light model is being utilized, with an average deposit of over $200 million per branch, aiding in managing inflationary trends [8] - The company aims to continue investing in talent and expanding its specialty businesses in higher growth markets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued loan production momentum and strong performance in 2022, particularly in specialty finance [6][17] - Credit quality remains strong, with proactive measures taken to improve credit metrics [13][44] - The company anticipates a mid-single-digit growth rate for non-interest income in 2022, driven by tax credit business expansion [67] Other Important Information - The company completed the core systems integration of First Choice and made significant progress in cultural integration [15] - Non-interest expense for Q4 was $64 million, with expectations for 2022 expenses around $250 million [49][50] - The company redeemed $50 million of subordinated debentures and issued $75 million of preferred stock to optimize its capital structure [51][53] Q&A Session Summary Question: Loan growth and pay-downs expectations for 2022 - Management expects continued growth in specialty lines and a moderation in payoffs, particularly in commercial real estate [58][60] Question: Fee income and deposit service charges - Fee waivers are estimated at $300,000 to $500,000 per quarter, with expectations for recovery in Q1 [61][62] Question: Residential real estate and construction loans - The decline in the residential book is primarily due to fix-and-flip loans, with potential for further short-term pressure [68][70] Question: Strategic approach to participations - The company is centralizing its participation strategy to improve efficiency and develop relationships with larger companies [76][78] Question: Provision for credit losses outlook - Management anticipates continued strong asset quality, with potential for negative provisions if growth remains muted [80] Question: Tax rate expectations for 2022 - The tax rate is expected to increase to around 22% to 22.5% due to profitability and higher state rates [103]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited statements show significant growth in assets, loans, and deposits, driven by the First Choice Bancorp (FCBP) acquisition [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew 32% to $12.89 billion, driven by increases in loans and deposits from the FCBP acquisition | Financial Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | $12,888,016 | $9,751,571 | +32.2% | | **Total Loans, net** | $8,964,487 | $7,088,264 | +26.5% | | **Goodwill** | $365,415 | $260,567 | +40.2% | | **Total Deposits** | $10,827,775 | $7,985,389 | +35.6% | | **Total Liabilities** | $11,448,381 | $8,672,596 | +32.0% | | **Total Shareholders' Equity** | $1,439,635 | $1,078,975 | +33.4% | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for the nine months rose to $82.2 million, though Q3 results were impacted by merger-related expenses | Metric (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net Interest Income** | $258,134 | $192,555 | | **Provision for Credit Losses** | $17,045 | $55,935 | | **Noninterest Income** | $45,113 | $35,997 | | **Noninterest Expense** | $182,225 | $116,109 | | **Net Income** | $82,244 | $45,453 | | **Diluted EPS** | $2.48 | $1.73 | - Third quarter 2021 net income was impacted by **$14.7 million in merger-related expenses** and a **$3.4 million charge for branch closures**[14](index=14&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the FCBP acquisition accounting, loan portfolio composition, credit loss allowance, and goodwill - The financial statements have been prepared in accordance with GAAP for interim financial information and include all adjustments considered necessary for fair presentation[28](index=28&type=chunk)[29](index=29&type=chunk) - The company is evaluating the impact of reference rate reform (Topic 848) as it works to amend contracts referencing LIBOR, with the guidance effective through December 31, 2022[30](index=30&type=chunk) [NOTE 2 - ACQUISITION](index=11&type=section&id=NOTE%202%20-%20ACQUISITION) The acquisition of First Choice Bancorp (FCBP) for ~$346 million resulted in $104.8 million of goodwill - The acquisition of FCBP closed on July 21, 2021, adding eight full-service branches in California[35](index=35&type=chunk) | Metric | Value (in millions) | | :--- | :--- | | **Transaction Consideration** | ~$346 | | **EFSC Shares Issued** | ~7.8 | | **Goodwill Recognized** | $104.8 | | **Merger-Related Costs (YTD)** | $16.6 | - For the nine months ended September 30, 2021, unaudited pro forma results, assuming the acquisition occurred on January 1, 2020, show **total revenues of $363.4 million** and **net income of $135.9 million**[41](index=41&type=chunk)[42](index=42&type=chunk) [NOTE 5 - LOANS](index=17&type=section&id=NOTE%205%20-%20LOANS) Total loans increased to $9.12 billion driven by the FCBP acquisition, with the Allowance for Credit Losses (ACL) on loans at 1.67% | Loan Category (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commercial and industrial | $3,386,599 | $3,100,299 | | Total real estate loans | $5,470,160 | $3,953,692 | | **Total Loans** | **$9,116,583** | **$7,224,935** | - The Allowance for Credit Losses (ACL) on loans increased to **$152.1 million** at September 30, 2021, from $136.7 million at December 31, 2020[62](index=62&type=chunk) - Total nonperforming loans were **$41.6 million** at September 30, 2021, compared to $38.5 million at December 31, 2020[66](index=66&type=chunk) [NOTE 6 - BRANCH CLOSURE](index=25&type=section&id=NOTE%206%20-%20BRANCH%20CLOSURE) The company initiated the closure of five branches, recognizing a total of $3.8 million in impairment charges - The company is closing five branches, three from the First Choice acquisition and two in St. Louis, to consolidate operations[87](index=87&type=chunk) - A total of **$3.8 million in impairment charges** were recognized in Q3 2021 related to the branch closures[87](index=87&type=chunk) [NOTE 10 - GOODWILL AND INTANGIBLE ASSETS](index=31&type=section&id=NOTE%2010%20-%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill increased by $104.8 million to $365.4 million due to the FCBP acquisition - Goodwill increased from $260.6 million at year-end 2020 to **$365.4 million** at September 30, 2021, with the **$104.8 million increase** attributed entirely to the FCBP acquisition[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The FCBP acquisition significantly boosted net interest income, assets, and deposits, while asset quality remains strong [Executive Summary](index=38&type=section&id=Executive%20Summary) The third quarter was defined by the FCBP acquisition, strong loan and deposit growth, and a dividend increase - The acquisition of First Choice Bancorp (FCBP) closed on July 21, 2021, significantly impacting financial results from that date forward[143](index=143&type=chunk) - Paycheck Protection Program (PPP) loans outstanding were **$439.0 million** net of fees at September 30, 2021, with PPP interest and fee income totaling **$6.0 million** for Q3 2021[146](index=146&type=chunk) - The company initiated the closure of five branches, recognizing a total impairment charge of **$3.8 million** in Q3 2021[151](index=151&type=chunk)[153](index=153&type=chunk) - The Board of Directors approved a quarterly dividend of **$0.20 per common share**, an increase of $0.01 from the prior quarter[158](index=158&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Q3 net interest income grew 19% from the linked quarter, while noninterest expense surged due to merger costs - Net interest income for Q3 2021 increased by **$15.6 million** over the linked quarter, mainly due to the addition of **$1.7 billion in earning assets** from the FCBP acquisition[166](index=166&type=chunk) - Net Interest Margin (NIM) decreased to **3.40%** in Q3 2021 from 3.46% in the linked quarter, primarily due to higher levels of low-yielding cash and lower yields on investments and loans[168](index=168&type=chunk)[169](index=169&type=chunk) - Noninterest expense increased to **$76.9 million** in Q3 2021, largely due to **$14.7 million in merger-related expenses** and **$3.4 million in branch closure expenses**[177](index=177&type=chunk) [Financial Condition](index=46&type=section&id=Financial%20Condition) Total assets reached $12.9 billion and deposits surged to $10.8 billion, driven by the FCBP acquisition | Balance Sheet Item (in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $12,888,016 | $9,751,571 | | **Total Loans (excluding PPP)** | $8,677,624 | $6,829,606 | | **PPP Loans, net** | $438,959 | $698,645 | | **Total Deposits** | $10,827,775 | $7,985,389 | - The provision for credit losses was **$19.7 million** for Q3 2021, primarily due to a **$23.9 million ACL** established for acquired FCBP non-PCD loans[193](index=193&type=chunk) - Nonperforming assets to total assets improved to **0.35%** at September 30, 2021, from 0.45% at December 31, 2020[199](index=199&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position and all regulatory capital ratios exceeded 'well-capitalized' levels - The company's liquidity position is strong, with cash and interest-bearing deposits totaling **$1.4 billion** at September 30, 2021[209](index=209&type=chunk) - Additional available liquidity includes **$704 million** from the FHLB and **$1.1 billion** from the Federal Reserve Bank[210](index=210&type=chunk) | EFSC Capital Ratios | September 30, 2021 | Minimum to be "Well Capitalized" | | :--- | :--- | :--- | | **Common Equity Tier 1** | 11.2% | 7.0% | | **Tier 1 Capital** | 12.2% | 8.5% | | **Total Capital** | 14.5% | 10.5% | | **Leverage Ratio** | 9.7% | 4.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is asset-sensitive, with a projected 5.5% increase in net interest income from a +100 bp rate shock | Rate Shock | Annual % Change in Net Interest Income | | :--- | :--- | | +300 bp | 22.5% | | +200 bp | 13.8% | | +100 bp | 5.5% | - At September 30, 2021, the Company had **$5.7 billion in variable rate loans**, of which $3.0 billion had a rate floor, with **94% of those loans priced at their floor**[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of September 30, 2021[241](index=241&type=chunk) - **No material changes** were made to internal controls over financial reporting during the third quarter of 2021[242](index=242&type=chunk) [PART II - OTHER INFORMATION](index=57&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) Management believes no current legal proceedings would have a material adverse effect on the company's financials - Management asserts that there are **no pending or threatened legal proceedings** that would have a material adverse effect on the Company's business or financial condition[244](index=244&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) No material changes have been made to the risk factors disclosed in the 2020 Annual Report on Form 10-K - **No material changes** to the risk factors described in the 2020 Annual Report on Form 10-K have occurred[246](index=246&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 470,412 shares in Q3 2021, with 1.3 million shares remaining under the repurchase plan | Period (2021) | Total Shares Purchased | Weighted-Average Price Paid | | :--- | :--- | :--- | | July | 145,926 | $45.79 | | August | 205,137 | $45.69 | | September | 119,349 | $43.43 | | **Q3 Total** | **470,412** | **$45.15** | - At the end of the quarter, **1,277,951 shares were still available for repurchase** under the existing program[247](index=247&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=58&type=section&id=Other%20Items) The report confirms no defaults on senior securities and lists exhibits filed, with other items being not applicable or having nothing to report - Item 3: **No defaults upon senior securities** were reported[249](index=249&type=chunk) - Item 4: Mine Safety Disclosures are **not applicable** to the Company[250](index=250&type=chunk) - Item 5: **No other information** was reported[251](index=251&type=chunk)

Enterprise Financial Services Corp (NASDAQ:EFSC) Q3 2021 Earnings Conference Call October 26, 2021 11:00 AM ET Company Participants Jim Lally - President & Chief Executive Officer Scott Goodman - President, Enterprises Bank & Trust Keene Turner - Chief Financial Officer & Chief Operating Officer Conference Call Participants Jeff Rulis - D.A. Davidson Andrew Liesch - Piper Sandler Damon DelMonte - KBW Brian Martin - Janney Montgomery Operator Good day, and welcome to the EFSC Earnings Conference Call. Today' ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share EFSC Nasdaq Global Select Market FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2021. ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ C ...

Enterprise Financial Services Corp (NASDAQ:EFSC) Q2 2021 Results Conference Call July 27, 2021 11:00 AM ET Company Participants Jim Lally - President and CEO Keene Turner - CFO and COO Scott Goodman - President, Enterprises Bank & Trust Doug Bauche - Chief Credit Officer Conference Call Participants Damon DelMonte - KBW David Long - Raymond James Brian Martin - Janney Montgomery Andrew Liesch - Piper Sandler Operator Good day, and welcome to the EFSC Earnings Call. At this time, I would like to turn the c ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Total assets grew to $10.19 billion by March 31, 2021, with Q1 2021 net income significantly increasing to $29.9 million due to reduced credit loss provisions [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $10.19 billion as of March 31, 2021, primarily fueled by increased deposits and a modest rise in net loans Condensed Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$10,190,699** | **$9,751,571** | | Total cash and cash equivalents | $883,815 | $537,703 | | Total loans, net | $7,157,254 | $7,088,264 | | **Total Liabilities** | **$9,098,202** | **$8,672,596** | | Total deposits | $8,515,444 | $7,985,389 | | **Total Shareholders' Equity** | **$1,092,497** | **$1,078,975** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for Q1 2021 more than doubled to $29.9 million, driven by a significant reduction in credit loss provisions and increased net interest income Q1 2021 vs. Q1 2020 Statement of Operations (Unaudited) | (in thousands, except per share data) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Net Interest Income | $79,123 | $63,368 | | Provision for credit losses | $46 | $22,264 | | Total Noninterest Income | $11,290 | $13,408 | | Total Noninterest Expense | $52,884 | $38,673 | | **Net Income** | **$29,926** | **$12,868** | | **Diluted Earnings Per Share** | **$0.96** | **$0.48** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities shifted to an outflow in Q1 2021, while financing activities provided a strong inflow, resulting in a $346.1 million increase in cash Cash Flow Summary for Three Months Ended March 31 (Unaudited) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,675) | $32,562 | | Net cash used in investing activities | $(101,840) | $(153,652) | | Net cash provided by financing activities | $451,627 | $137,517 | | **Net increase in cash and cash equivalents** | **$346,112** | **$16,427** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, loan portfolio composition, and highlight the significant April 2021 merger agreement with First Choice Bancorp - As of March 31, 2021, loans remaining in COVID-19 related deferral status totaled **$21.1 million**[57](index=57&type=chunk) - The company entered into a definitive merger agreement with First Choice Bancorp on April 26, 2021, with the all-stock transaction valued at approximately **$397.7 million** and creating a combined company with approximately **$12.7 billion** in assets[103](index=103&type=chunk) Loan Composition (in thousands of dollars) | Loan Category | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commercial and industrial | $3,096,319 | $3,100,299 | | Real estate - Commercial investor owned | $1,669,215 | $1,589,419 | | Real estate - Commercial owner occupied | $1,517,755 | $1,498,408 | | Real estate - Construction and land development | $510,501 | $546,686 | | Real estate - Residential | $303,047 | $319,179 | | Other | $212,068 | $187,083 | | **Total Loans** | **$7,288,781** | **$7,224,935** | Allowance for Credit Losses (ACL) on Loans Activity (in thousands of dollars) | | Three months ended March 31, 2021 | | :--- | :--- | | Balance at December 31, 2020 | $136,671 | | Provision for credit losses | $503 | | Charge-offs | $(6,474) | | Recoveries | $827 | | **Balance at March 31, 2021** | **$131,527** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 2021 performance to increased net interest income and minimal credit loss provisions, while maintaining robust capital and announcing a new share repurchase program [Executive Summary](index=30&type=section&id=Executive%20Summary) Q1 2021 net income reached $29.9 million, driven by lower credit loss provisions and higher net interest income, with loans growing to $7.3 billion and deposits to $8.5 billion Key Financial Highlights | Metric | Q1 2021 | Q4 2020 | Q1 2020 | | :--- | :--- | :--- | :--- | | Net Income (in thousands) | **$29,926** | **$28,931** | **$12,868** | | Diluted EPS | **$0.96** | **$1.00** | **$0.48** | | Return on average assets | 1.22% | 1.26% | 0.70% | | Net interest margin (tax equivalent) | 3.50% | 3.66% | 3.79% | | Nonperforming loans to total loans | 0.50% | 0.53% | 0.68% | - The company's participation in the Paycheck Protection Program (PPP) continued, with **$737.7 million** in net PPP loans outstanding at quarter-end, contributing **$8.5 million** in interest and fee income during Q1 2021[120](index=120&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Net interest income reached $79.1 million in Q1 2021, though net interest margin compressed to 3.50% due to higher cash and reduced PPP fee income, while noninterest expense increased from acquisition costs - Net interest margin (NIM) was **3.50%** for Q1 2021, a decrease of **16 basis points** from the linked quarter (**3.66%**) and **29 basis points** from the prior year quarter (**3.79%**)[123](index=123&type=chunk)[142](index=142&type=chunk) - The decrease in NIM from the linked quarter was primarily driven by a **21 basis point** decrease in earning asset yields, impacted by higher cash levels (**13 bps**), reduced income from PPP forgiveness (**11 bps**), and lower purchase accounting income (**5 bps**)[142](index=142&type=chunk) - Noninterest income decreased by **$7.2 million** from the linked quarter, largely due to a **$5.1 million** decline in tax credit income (expense), as several tax credit projects expected to close in Q1 were delayed[124](index=124&type=chunk)[145](index=145&type=chunk) - Noninterest expense increased to **$52.9 million**, which included a full quarter of Seacoast operations (**$10.2 million**) and **$3.1 million** in merger-related expenses[149](index=149&type=chunk) [Financial Condition](index=37&type=section&id=Financial%20Condition) The company's balance sheet showed continued growth and strong credit quality, with total loans reaching $7.3 billion and deposits increasing to $8.5 billion, while nonperforming loans decreased - Total loans increased by **$63.8 million** (**3.6% annualized**) from the linked quarter to **$7.3 billion**, with growth led by Commercial Real Estate (CRE) despite declining line of credit utilization at **37.6%**[155](index=155&type=chunk) - The provision for credit losses was minimal at **$46 thousand** for Q1 2021, a significant reduction from **$22.3 million** in Q1 2020, due to an improved economic forecast offsetting specific loan charge-offs[164](index=164&type=chunk)[165](index=165&type=chunk) - Nonperforming loans decreased by **$1.8 million** from the linked quarter to **$36.7 million**, representing **0.50%** of total loans[168](index=168&type=chunk) - Total deposits increased by **$530.1 million** from the linked quarter to **$8.5 billion**, driven by a **$558.8 million** growth in core deposits, with noninterest-bearing deposits constituting **34.2%** of the total[176](index=176&type=chunk)[177](index=177&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with $883.8 million in cash and robust capital levels well above regulatory requirements, including a Common Equity Tier 1 ratio of 11.0% - Liquidity is strong with **$883.8 million** in cash and cash equivalents, and an additional **$819 million** in borrowing capacity from the FHLB and **$923 million** from the Federal Reserve Bank[183](index=183&type=chunk)[186](index=186&type=chunk) EFSC Capital Ratios | Ratio | March 31, 2021 | Minimum Requirement (incl. buffer) | | :--- | :--- | :--- | | Common equity tier 1 capital | **11.0%** | 7.0% | | Tier 1 capital | **12.3%** | 8.5% | | Total capital | **15.1%** | 10.5% | | Leverage ratio | **9.5%** | 4.0% | - The company's banking subsidiary, Enterprise Bank & Trust, met the definition of 'well-capitalized' with a Common Equity Tier 1 ratio of **12.4%** and a Total Capital ratio of **13.6%**[194](index=194&type=chunk)[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with simulations indicating asset sensitivity where a 100 basis point rate increase could boost net interest income by 2.3% Interest Rate Shock Impact on Net Interest Income | Rate Shock | Change in Net Interest Income | | :--- | :--- | | +300 bp | **12.2%** | | +200 bp | **7.1%** | | +100 bp | **2.3%** | - As of March 31, 2021, the company had **$4.1 billion** in variable rate loans, of which **$2.4 billion** were based on LIBOR, with approximately **92%** of the **$1.7 billion** in loans with rate floors already priced at their floor[215](index=215&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[218](index=218&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, those controls[219](index=219&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, none of which are expected to have a material adverse effect on its financial condition or operations - Management believes there are no pending or threatened legal proceedings that would have a material adverse effect on the business, financial condition, or results of operations[221](index=221&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - No material changes have been made to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2020[223](index=223&type=chunk) [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) The Board of Directors approved a new share repurchase program on April 29, 2021, authorizing the repurchase of up to 2,000,000 shares of common stock - A new share repurchase program was approved on April 29, 2021, authorizing the repurchase of up to **2,000,000 shares** of common stock[231](index=231&type=chunk)