Enterprise Financial(US:EFSC)2023-02-23 16:00Acquisitions - The Company closed its acquisition of First Choice on July 21, 2021, which operated eight branches with total assets of $2.3 billion, enhancing its presence in California [32]. - The acquisition of Seacoast was completed on November 12, 2020, with total assets of $1.3 billion, improving the Company's commercial and specialty lending capabilities [34]. Business Strategy - The Company's business strategy focuses on generating attractive shareholder returns through comprehensive financial services primarily for privately-held businesses and their owners [23]. - The Company emphasizes a relationship-oriented approach to client acquisition, targeting businesses, business owners, and professionals [25]. - The Company offers a wide range of lending services, including C&I, CRE, and SBA loans, supported by a variety of deposit products [24]. - The Company has developed expertise in specialized lending niches, such as SBA 7(a) loans, life insurance premium financing, and tax credit-related lending [26]. - The Company utilizes technology to enhance client access to products and services, including online banking and mobile applications [29]. Regulatory Compliance - The Company is subject to regulation by the Federal Reserve and the FDIC, ensuring compliance with banking standards [36]. - The Company is subject to extensive federal and state regulatory oversight, including capital adequacy standards established by the FDIC [59]. - As of December 31, 2022, all of the Bank's capital ratios qualified it to be "well-capitalized" for regulatory purposes [66]. - The Basel III Capital Rules require a Common Equity Tier 1 (CET1) capital ratio of 7.0% to avoid restrictions on capital distributions [64]. - The Company had $93.0 million of trust preferred securities that are grandfathered under Basel III provisions as of December 31, 2022 [50]. - The Dodd-Frank Act centralized consumer financial protection responsibilities with the Consumer Financial Protection Bureau (CFPB), impacting institutions with over $10 billion in assets [67]. - The Company must maintain certain capital ratios and is subject to limitations on aggregate investments in real estate and other areas [59]. - The Federal Reserve requires prior approval for stock repurchase plans under certain conditions [51]. - The Company must comply with incentive compensation policies to ensure they do not encourage excessive risk-taking [54]. Employee Information - The Bank employs 1,074 regular full-time and 53 part-time associates, with additional seasonal and temporary staff as needed [82]. - The Bank's minimum wage was raised to $17 per hour as of January 1, 2023, with 96% of associates earning above this minimum [86]. - Approximately 60% of associates are eligible for the Company's Short Term Incentive Plan (STIP), which aligns compensation with performance [85]. Financial Regulations - The Durbin Amendment, effective July 1, 2022, capped debit card interchange fees at 21 cents plus 5 basis points, resulting in reduced interchange income for the Bank [79]. - The Community Reinvestment Act (CRA) requires the Bank to meet the credit needs of local communities, and the Bank has an outstanding rating under CRA [74]. - The Bank's payment of dividends is restricted by Missouri law and federal regulations, particularly if the Bank is deemed undercapitalized [72]. - The Volcker Rule prohibits certain proprietary trading and investment activities, with amendments effective October 1, 2020, clarifying permissible banking activities [78]. - The Bank's lending operations face enhanced scrutiny due to its concentration in commercial real estate loans, with specific guidelines for risk assessment [77]. Recognition and Impact - The Company has been recognized as one of the "Best Banks to Work for" by American Banker magazine for five consecutive years, ranking fifth among similar institutions in 2022 [88]. - The Bank's operations are influenced by Federal Reserve monetary policies, which affect loan growth, investments, and interest rates [80].