[PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the specified periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) As of September 30, 2022, total assets decreased to $13.0 billion from $13.5 billion at year-end 2021, primarily due to a $1.28 billion reduction in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$12,994,787** | **$13,537,358** | | Total cash and cash equivalents | $744,876 | $2,021,689 | | Total loans, net | $9,214,415 | $8,872,601 | | **Total Liabilities** | **$11,548,569** | **$12,008,242** | | Total deposits | $11,057,594 | $11,343,799 | | **Total Shareholders' Equity** | **$1,446,218** | **$1,529,116** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) For Q3 2022, net income surged to $50.2 million from $13.9 million in Q3 2021, driven by increased net interest income Key Operational Results (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $124,290 | $97,273 | $335,068 | $258,134 | | Provision (benefit) for credit losses | $676 | $19,668 | $(2,734) | $17,045 | | Total Noninterest Income | $9,454 | $17,619 | $42,289 | $45,113 | | Total Noninterest Expense | $68,843 | $76,885 | $197,067 | $182,225 | | **Net Income** | **$50,200** | **$13,913** | **$143,042** | **$82,244** | | **Diluted EPS** | **$1.32** | **$0.38** | **$3.73** | **$2.48** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Unaudited%29) Comprehensive income for Q3 2022 was $5.5 million, nearly flat, while the nine-month period recorded a $28.9 million comprehensive loss Comprehensive Income (Loss) Summary (in thousands) | Period | Net Income | Total other comprehensive loss, after-tax | Comprehensive income (loss) | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | $50,200 | $(44,710) | $5,490 | | **Nine Months Ended Sep 30, 2022** | $143,042 | $(171,968) | $(28,926) | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Unaudited%29) Total shareholders' equity decreased from $1.53 billion at year-end 2021 to $1.45 billion at September 30, 2022, primarily due to other comprehensive loss and stock repurchases - For the nine months ended September 30, 2022, total shareholders' equity decreased by **$82.9 million**. Key changes included **+$143.0 million** from net income, **-$172.0 million** from other comprehensive loss, **-$32.9 million** from stock repurchases, and **-$27.8 million** from dividends[19](index=19&type=chunk)[207](index=207&type=chunk) - In the second quarter of 2022, the company retired **1,980,093 shares** of treasury stock, which reduced additional paid-in capital by **$27.7 million** and retained earnings by **$45.8 million**[122](index=122&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) For the nine months ended September 30, 2022, cash and cash equivalents decreased by $1.28 billion due to investing and financing activities Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $187,857 | $105,630 | | Net cash (used in) provided by investing activities | $(912,124) | $13,432 | | Net cash (used in) provided by financing activities | $(552,546) | $732,522 | | **Net (decrease) increase in cash and cash equivalents** | **$(1,276,813)** | **$851,584** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The notes detail accounting policies, loan portfolio composition, and credit loss allowances, with nonperforming loans significantly decreasing Loan Portfolio Composition (in thousands) | Loan Category | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Commercial and industrial | $3,710,012 | $3,396,590 | | Commercial real estate - investor owned | $2,286,458 | $2,141,143 | | Commercial real estate - owner occupied | $2,152,189 | $2,035,785 | | Construction and land development | $583,649 | $734,073 | | **Total Loans** | **$9,354,987** | **$9,017,642** | - The Allowance for Credit Losses (ACL) on loans was **$140.6 million** at September 30, 2022, down from **$145.0 million** at December 31, 2021, including a **$40.8 million** qualitative adjustment[59](index=59&type=chunk)[62](index=62&type=chunk) - Nonperforming loans decreased to **$18.2 million** at September 30, 2022, from **$28.0 million** at December 31, 2021[64](index=64&type=chunk) - Off-balance-sheet commitments to extend credit increased to **$2.91 billion** at September 30, 2022, from **$2.48 billion** at year-end 2021[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting loan growth, deposit management, improved credit quality, and the impact of acquisitions [Executive Summary](index=38&type=section&id=Executive%20Summary) The company reported strong Q3 2022 earnings with **$50.2 million** net income, expanded net interest margin, and improved asset quality Q3 2022 Financial Highlights | Metric | Q3 2022 | Q2 2022 (Linked) | | :--- | :--- | :--- | | Net Income (in thousands) | $50,200 | $45,149 | | Diluted EPS | $1.32 | $1.19 | | Net Interest Margin | 4.10% | 3.55% | | Return on Average Assets | 1.51% | 1.34% | - Paycheck Protection Program (PPP) loans outstanding declined to **$13.2 million** at September 30, 2022, from **$272.0 million** at year-end 2021[148](index=148&type=chunk)[188](index=188&type=chunk) - Excluding PPP loans, total loans grew by **$596.1 million**, or **7%**, year-to-date from December 31, 2021[152](index=152&type=chunk) [Results of Operations](index=41&type=section&id=RESULTS%20OF%20OPERATIONS) Net interest income for Q3 2022 was **$124.3 million**, driven by higher loan balances and expanding yields, while noninterest income decreased - Net interest margin (NIM) increased to **4.10%** in Q3 2022 from **3.55%** in the linked quarter, due to higher yields on loans and investments[170](index=170&type=chunk) - Noninterest income decreased by **$4.7 million** from the linked quarter, mainly due to a **$4.8 million** drop in tax credit income and a **$0.9 million** decline in card services revenue[173](index=173&type=chunk) - Noninterest expense increased by **$3.4 million** from the linked quarter, driven by higher employee compensation and **$1.8 million** in variable deposit costs[180](index=180&type=chunk) [Financial Condition](index=46&type=section&id=Financial%20Condition) Total assets decreased to **$13.0 billion** as cash was deployed into loan growth, while deposits decreased due to strategic shifts Balance Sheet Changes (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $12,994,787 | $13,537,358 | $(542,571) | | Loans (excluding PPP) | $9,341,822 | $8,921,989 | $419,833 | | Deposits | $11,057,594 | $11,343,799 | $(286,205) | - Specialty loan categories, including sponsor finance and life insurance premium financing, saw significant growth of **28%** and **21%** respectively since year-end 2021[188](index=188&type=chunk) - Nonperforming assets decreased to **$18.5 million** from **$31.5 million** at year-end 2021, improving the ratio to total assets to **0.14%** from **0.23%**[155](index=155&type=chunk)[200](index=200&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial borrowing capacity, and all capital ratios exceed regulatory requirements - The company has substantial available liquidity, including an additional **$832 million** from the FHLB and **$1.4 billion** from the Federal Reserve Bank[213](index=213&type=chunk) Regulatory Capital Ratios (EFSC) | Ratio | September 30, 2022 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 | 11.0% | 6.5% | | Tier 1 Capital | 12.6% | 8.0% | | Total Capital | 14.2% | 10.0% | | Leverage Ratio | 10.4% | 5.0% | - The tangible common equity to tangible assets ratio, a non-GAAP measure, was **7.86%** at September 30, 2022, down from **8.13%** at December 31, 2021, primarily due to a decrease in accumulated other comprehensive income[156](index=156&type=chunk)[230](index=230&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk using earnings simulations and is transitioning **$1.6 billion** in loans from LIBOR Interest Rate Shock Impact on Net Interest Income | Rate Shock | Annual % change in net interest income | | :--- | :--- | | +300 bp | 13.5% | | +200 bp | 9.0% | | +100 bp | 4.4% | | -100 bp | (5.7)% | | -200 bp | (13.9)% | - The company is managing its transition away from LIBOR, with **$1.6 billion** in loans, **$118 million** in borrowings, and **$660.9 million** (notional) in derivatives indexed to LIBOR[242](index=242&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[248](index=248&type=chunk) - No material changes were made to internal controls over financial reporting during the quarter ended September 30, 2022[249](index=249&type=chunk) [PART II - OTHER INFORMATION](index=58&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) Management believes no pending legal proceedings would have a material adverse effect on the company's financial condition - Management believes there are no pending or threatened legal proceedings that would have a material adverse effect on the company's business, financial condition, or results of operations[251](index=251&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the risk factors described in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021[253](index=253&type=chunk) [Other Required Disclosures (Items 2, 3, 4, 5 & 6)](index=58&type=section&id=Other%20Items) This section covers standard disclosures, reporting no unregistered equity sales, defaults, or other material information - The company reported no unregistered sales of equity securities, defaults upon senior securities, or other material information for the period[254](index=254&type=chunk)[255](index=255&type=chunk)[259](index=259&type=chunk) - Mine safety disclosures are not applicable to the company[256](index=256&type=chunk)[257](index=257&type=chunk)

Enterprise Financial Services Corp (NASDAQ:EFSC) Q3, 2022, Earnings Call October 25, 2022 11:00 AM ET Company Participants Jim Lally - President and Chief Executive Officer Keene Turner - Chief Financial Officer and Chief Operating Officer Scott Goodman - President, Enterprise Bank and Trust Conference Call Participants Jeffrey Rulis - D.A. Davidson Andrew Liesch - Piper Sandler Damon DelMonte - KBW Brian Martin - Janney Montgomery Operator Good day. And welcome to the Enterprise Financial Services Corporat ...

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 June 30, 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 Addr ...

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' ...