updated 4/28/2011 8:16:19 AM ET 2011-04-28T12:16:19

  • First quarter net income of $7.1 million or $0.42 per fully diluted share
  • Pre-tax, pre-provision operating earnings up 56% over prior year period
  • Core deposits increase 28% and demand deposits up 49% over prior year
  • Net interest income increases 44% over prior year period
  • Nonperforming loans drop 22% from one year ago

ST. LOUIS, April 28, 2011(GLOBE NEWSWIRE) -- Enterprise Financial Services Corp (Nasdaq:EFSC) (the "Company") reported net income of $7.1 million for the quarter ended March 31, 2011 compared to a net loss of $3.0 million for the prior year period. After deducting dividends on preferred stock, the Company reported net income of $0.42 per diluted share for the first quarter of 2011 compared to a net loss of $0.25 per diluted share for the first quarter of 2010. The first quarter net income and diluted earnings per share figures represented record quarterly financial results for the Company.

As previously reported, on January 7, 2011, Enterprise Bank & Trust (the "Bank"), the Company's banking subsidiary, entered into a loss share agreement with the FDIC and acquired certain assets and assumed certain liabilities of Legacy Bank of Scottsdale, Arizona ("Legacy"). The acquisition consisted of assets with an estimated fair value of approximately $128.7 million and liabilities with an estimated fair value of approximately $130.6 million.   Approximately $43.5 million of the deposits were assumed at a premium of 1%. The assets were purchased at a 7.6% discount to their historic book value. In addition, the Bank acquired approximately $69.2 million in trust assets.   Pursuant to the loss share agreement, the FDIC will reimburse the Bank for 80% of losses incurred on certain loans and other real estate. As part of the acquisition, the Company provided the FDIC with a Value Appreciation Instrument whereby 372,500 units were awarded to the FDIC at an exercise price of $10.63 per unit. The units were exercisable at any time from January 14, 2011 until January 6, 2012.   The FDIC exercised the units on January 20, 2011 at a settlement price of $11.8444 and a cash payment of $452,364 was made to the FDIC on January 21, 2011.

Peter Benoist, President and Chief Executive Officer, commented, "The Company's operating performance continues to show strong improvement with first quarter net income increasing 10% over last quarter. Robust growth in core deposits and a solid rebound in commercial and industrial loans, coupled with continued improvement in asset quality, bode well for future results."   

Benoist added, "We also look forward to further growth in Arizona. The completion of the Legacy Bank acquisition in Scottsdale during the first quarter expands our footprint in the greater Phoenix area and positions us to focus on organic deposit and loan growth in that market." 

On a pre-tax, pre-provision basis, the Company's operating income was $14.1 million in the first quarter of 2011, a 4% increase from the linked fourth quarter and a 56% increase from the prior year period.

Pre-tax, pre-provision income , which is a non-GAAP (Generally Accepted Accounting Principles) financial measure, is presented because the Company believes adjusting its results to exclude loan loss provision expense, sales and fair value writedowns of other real estate, and sales of securities provides shareholders with a more comparable basis for evaluating period-to-period operating results. A schedule reconciling GAAP pre-tax income (loss) to pre-tax, pre-provision income is provided in the attached tables.

Banking Segment

Deposits

Core deposits, which exclude brokered certificates of deposit and include reciprocal CDARS deposits, increased $132.7 million, or 6%, in the first quarter of 2011 compared to the fourth quarter of 2010. First quarter deposit growth included an $81.9 million increase in demand deposits, an $80.6 million increase in money market accounts and other interest-bearing deposit accounts, and a $55.9 million increase in non-CDARS certificates of deposit. Reciprocal CDARS certificates of deposits decreased by $85.7 million in the first quarter of 2011 to $74.8 million compared to $160.5 million at December 31, 2010 and $147.9 million at March 31, 2010.  Approximately $36.6 million of the money market increase was the result of a new CDARS money market sweep product, of which approximately $32.0 million, or 88%, were transfers from CDARS certificates of deposit. 

Strong deposit growth was attributed to the Company's marketing and sales activities, as well as the continuing cash accumulation trend among our commercial clients. The Company completed a successful deposit promotion in Arizona, generating more than $22.9 million in money market balances in the first quarter of 2011. In addition, approximately $12.0 million of the money market growth and $33.0 million of the certificate of deposit growth in the first quarter of 2011 was related to the Company's Enterprise Advisory Services initiative, a proprietary deposit platform marketed to registered investment advisory firms. 

Noninterest-bearing demand deposits rose $147.2 million, or 49%, compared to March 31, 2010 and increased to 18% of total deposits at March 31, 2011 from 16% at December 31, 2010 and March 31, 2010.

On a year over year basis, core deposits increased $501.7 million, or 28%.   Total deposits at March 31, 2011 were $2.4 billion, an increase of 6% over December 31, 2010 and 28% higher than March 31, 2010. 

Loans

Portfolio loans totaled $2.0 billion at March 31, 2011, including $191.4 million of loans covered under FDIC loss share agreements.  Since December 31, 2010, portfolio loans covered under FDIC loss share agreements increased $64.7 million, or 51%, as a result of the Legacy acquisition. Excluding the loans covered under loss share, total portfolio loans were essentially flat in the first quarter of 2011, although Commercial & Industrial loans increased $19.0 million, or 3%, during the quarter and represent almost one-third of the Company's loan portfolio at March 31, 2011. The net increase in Commercial & Industrial loans was a result of strong new business activity rather than higher credit line utilization rates. The increase in Commercial & Industrial loans was offset by a decrease of $29.1 million in Construction and Residential Real Estate loans as the Company continued to reduce its exposure to these sectors.  

On a year over year basis, total portfolio loans increased $153.3 million, or 9%. Excluding the loans covered under loss share, portfolio loans decreased $25.1 million, or 1%. Commercial & Industrial loans increased $61.6 million, or 11% from March 31, 2010 to March 31, 2011.

Asset quality

Nonperforming loans, including troubled debt restructurings of $9.7 million, were $43.5 million at March 31, 2011, down from $46.4 million at December 31, 2010 and $55.8 million at March 31, 2010. During the quarter ended March 31, 2011, there were $18.5 million of additions, $4.0 million of chargeoffs, $6.4 million of other principal reductions, $7.0 million of assets transferred to other real estate, and $4.0 million of assets transferred back to performing status. Of the $18.5 million in new nonperforming loans, five construction real estate loans representing three relationships comprised over $15.7 million, or 85% of the total. Of these, two relationships totaling $6.0 million were transferred to other real estate during the quarter.

Nonperforming loans represented 2.23% of total loans at March 31, 2011 versus 2.45% of total loans at December 31, 2010 and 3.10% at March 31, 2010. 

Nonperforming loans by portfolio class at March 31, 2011 were as follows (in millions):

       
  Total portfolio Nonperforming % NPL
Construction, Real Estate/Land

 Acquisition & Development
$176.2 $16.8 9.53%
Commercial Real Estate – investor owned 455.7 9.4 2.06%
Commercial Real Estate – owner occupied  325.1 1.2 0.37%
Residential Real Estate 174.4 9.5 5.45%
Commercial & Industrial 613.0 6.6 1.08%
Consumer & Other 16.7 -- 0.00%
Portfolio loans covered under FDIC loss share 191.4 -- 0.00%
Total $1,952.5 $ 43.5 2.23%
       

Loans that were 30-89 days delinquent at March 31, 2011 remained at very low levels, representing 0.12% of the portfolio compared to 0.13% at December 31, 2010.

Other real estate at March 31, 2011 was $51.3 million, compared to $36.2 million at December 31, 2010 and $20.9 million at March 31, 2010. Of the $15.1 million increase over the linked fourth quarter, almost 80%, or $12.0 million, was comprised of other real estate covered under FDIC loss share agreements, principally related to the Legacy acquisition.  Approximately 45% of total other real estate, or $22.9 million, is covered by one of three FDIC loss share agreements.  

Other real estate not covered by an FDIC loss share agreement totaled $28.4 million at March 31, 2011, an increase of $3.1 million from December 31, 2010. At March 31, 2010 other real estate not covered by FDIC loss share agreements totaled $18.7 million.

During the first quarter, the Company sold $4.0 million in other real estate, recording a gain of $423,000. 

Nonperforming assets as a percentage of total assets declined to 2.48% at March 31, 2011 from 2.59% at December 31, 2010 and 3.19% at March 31, 2010. 

Net charge-offs in the first quarter of 2011 declined to $3.5 million, representing an annual rate of 0.73% of average loans, compared to  net charge-offs of $7.6 million, an annualized rate of 1.57% of average loans, in the linked fourth quarter and $12.7 million, an annualized rate of 2.83% of average loans, in the first quarter of 2010. 

Provision for loan losses was $3.6 million in the first quarter of 2011, relatively flat compared to $3.3 million in the fourth quarter of 2010 and significantly less than the $13.8 million recorded in the first quarter of 2010.   The large provision for loan losses in the first quarter of 2010 was due to higher levels of loan risk rating downgrades. 

The Company's allowance for loan losses was 2.19% of total loans at March 31, 2011, representing 98% of nonperforming loans. The loan loss allowance was 2.26% at December 31, 2010 representing 92% of nonperforming loans and 2.45% at March 31, 2010 representing 79% of nonperforming loans.

Net Interest Income

Net interest income for the banking segment decreased $1.6 million, or 5%, in the first quarter of 2011 compared to the linked fourth quarter. On a year over year basis, net interest income increased $8.0 million, or 40%. Including the effect of parent company debt, the net interest rate margin was 4.19% for the first quarter of 2011, compared to 4.70% for the fourth quarter of 2010 and 3.47% in the first quarter of 2010.   The net interest rate margin for the fourth quarter of 2010 was significantly impacted by the yield on the loans covered under FDIC loss share. Loans covered under FDIC loss share yielded 29.7% in the fourth quarter of 2010 primarily due to cash flows on paid off covered loans that exceeded expectations.   In the first quarter of 2011, the loans covered under FDIC loss share yielded 16.8%. Absent the FDIC loss share loans, the net interest rate margin was 3.34% for the first quarter of 2011 compared to 3.57% for the fourth quarter of 2010.   The reduction in the net interest rate margin, excluding the effect of loans covered under FDIC loss share, was primarily due to the Company's increasingly strong liquidity position.

Wealth Management Segment

Fee income from the Wealth Management segment includes Wealth Management revenue and income from state tax credit brokerage activities. In the fourth quarter of 2010, the Company elected to record Wealth Management revenue on a gross basis. This resulted in a $971,000 increase in Wealth Management revenue and a corresponding increase in Other expenses. Excluding the gross up, Wealth Management revenue decreased $83,000, or 5%, over the linked fourth quarter.    

Trust assets under administration were $1.6 billion at March 31, 2011, compared to $1.5 billion at December 31, 2010 and $1.3 billion at March 31, 2010.

State tax credit brokerage activities, net of fair value marks on tax credit assets and related interest rate hedges, was $155,000 for the first quarter of 2011 compared to $(3,000) for the fourth quarter of 2010, and $518,000 in the first quarter of 2010.   Tax credit sales in the first quarter of 2011 were lower than expected due to the timing of customer purchases.  

Other Business Results

Total capital to risk-weighted assets was 14.34% at March 31, 2011 compared to 14.30% at December 31, 2010 and 14.29% at March 31, 2010. The tangible common equity ratio was 5.22% at March 31, 2011 versus 5.26% at December 31, 2010 and 5.92% at March 31, 2010.   The year over year reduction in the tangible common equity ratio was attributable to increased assets resulting from the Company's FDIC-assisted transactions.   The Company's Tier 1 common equity ratio was 7.51% at March 31, 2011 compared to 7.37% at December 31, 2010 and 7.16% at March 31, 2010.    The Company believes that the tangible common equity and the Tier 1 common equity ratios are important financial measures of capital strength even though they are considered to be non-GAAP measures and are not part of the regulatory capital requirements to which the Company is subject.  The attached tables contain a reconciliation of these ratios to U.S. GAAP.

Other Income for the first quarter of 2011 was $1.4 million.   In the fourth quarter of 2010, Other income was negative due to net adjustments on loans covered under FDIC loss share. 

For the first quarter of 2011, Noninterest expenses decreased $2.2 million, or 11%, compared to the linked fourth quarter. The decrease was primarily due to a $1.9 million reduction in loan legal and other real estate expenses, the reversal of a portion of the accrual for a potential fraud loss on a depository account established in the fourth quarter of 2010 and a decrease in the reserve for unfunded commitments. Those reduced expenses were partially offset by a $1.2 million increase in salaries and benefits primarily due to the Legacy acquisition and various employment benefits.

Compared to the prior year period, Noninterest expenses increased $3.8 million, or 28%.   The increase over the prior year period was comprised of $2.1 million in salaries and benefits primarily due to variable compensation accruals and staff additions to support our Arizona acquisition activity and $1.2 million in higher loan legal and other real estate expenses.

The Company's efficiency ratio was 55.1% for the quarter ended March 31, 2011 compared to 62.7% for quarter ended December 31, 2010 and 60.2% for the prior year period. 

As part of a program to conduct quarterly conference calls to discuss financial results, the Company will host a conference call at 2:30 p.m. CDT on Thursday, April 28, 2011. The call will be accessible on Enterprise Financial Services Corp's home page, at www.enterprisebank.com under "Investor Relations" and by telephone at 1-888-285-8004 (Conference ID #56959932.) Recorded replays of the conference call will be available on the website beginning two hours after the call's completion. The replay will be available for approximately two weeks following the conference call. 

Enterprise Financial Services Corp operates commercial banking and wealth management businesses in metropolitan St. Louis, Kansas City, and Phoenix. The Company is primarily focused on serving the needs of privately held businesses, their owner families, executives and professionals. 

Readers should note that in addition to the historical information contained herein, this press release contains forward-looking statements, which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. We use the words "expect" and "intend" and variations of such words and similar expressions in this communication to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, burdens imposed by federal and state regulations of banks, credit risk, exposure to local and national economic conditions, risks associated with rapid increase or decrease in prevailing interest rates, effects of mergers and acquisitions, effects of critical accounting policies and judgments, legal and regulatory developments and competition from banks and other financial institutions, as well as other risk factors described in the Company's 2010 Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events unless required under the federal securities laws.

 
 
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited)
           
(In thousands, except per share data) For the Quarter Ended
  Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
INCOME STATEMENTS 2011 2010 2010 2010 2010
           
NET INTEREST INCOME          
Total interest income  $ 34,563  $ 36,018  $ 32,032  $ 26,710  $ 27,275
Total interest expense  7,825  7,909  7,742  8,108  8,652
Net interest income   26,738  28,109  24,290  18,602  18,623
Provision for loan losses  3,600  3,325  7,650  8,960  13,800
Net interest income after provision for loan losses  23,138  24,784  16,640  9,642  4,823
           
NONINTEREST INCOME          
Wealth Management revenue  1,683  2,489  1,326  1,302  1,297
Deposit service charges  1,137  1,145  1,208  1,212  1,174
Sale of other real estate  423  (355)  144  302  (12)
State tax credit activity, net  155  (3)  884  851  518
Sale of securities  174  781  124  525  557
Other income (loss)  1,391  (845)  2,365  849  522
Total noninterest income  4,963  3,212  6,051  5,041  4,056
           
NONINTEREST EXPENSE          
Salaries and benefits  8,688  7,517  7,363  7,035  6,598
Occupancy  1,139  1,126  901  1,097  1,173
Furniture and equipment  354  358  341  325  370
Other  7,284  10,648  6,853  5,689  5,514
Total noninterest expense  17,465  19,649  15,458  14,146  13,655
           
Income (loss) before income tax  10,636  8,347  7,233  537  (4,776)
Income tax expense (benefit)  3,557  1,921  2,262  (200)  (1,762)
Net income (loss)  7,079  6,426  4,971  737  (3,014)
Dividends on preferred stock  (626)  (622)  (618)  (615)  (612)
Net income (loss) available to common shareholders  $ 6,453  $ 5,804  $ 4,353  $ 122  $ (3,626)
           
Basic earnings (loss) per share  $ 0.43  $ 0.39  $ 0.29  $ 0.01  $ (0.25)
Diluted earnings (loss) per share  $ 0.42  $ 0.38  $ 0.29  $ 0.01  $ (0.25)
Return on average assets 0.90% 0.87% 0.69% 0.02%  (0.63%)
Return on average common equity 16.82% 14.95% 11.61% 0.34%  (10.26%)
Efficiency ratio  55.09% 62.73% 50.95% 59.84% 60.21%
Noninterest expense to average assets 2.45% 2.95% 2.46% 2.42% 2.37%
           
YIELDS (fully tax equivalent)          
Loans not covered under FDIC loss share 5.49% 5.45% 5.49% 5.56% 5.59%
Loans covered under FDIC loss share 16.81% 29.72% 17.48% 14.48% 16.92%
Total portfolio loans 6.59% 7.08% 6.34% 5.62% 5.67%
Securities 2.70% 2.60% 2.75% 2.85% 2.76%
Federal funds sold 0.26% 0.26% 0.30% 0.31% 0.36%
Yield on earning assets 5.40% 6.01% 5.67% 4.95% 5.06%
Interest-bearing deposits 1.16% 1.21% 1.24% 1.44% 1.56%
Subordinated debt 5.34% 5.71% 5.88% 5.84% 5.86%
Borrowed funds 1.89% 2.32% 2.29% 2.55% 2.74%
Cost of paying liabilities 1.39% 1.49% 1.54% 1.75% 1.87%
Net interest spread 4.01% 4.52% 4.13% 3.20% 3.19%
Net interest rate margin 4.19% 4.70% 4.31% 3.46% 3.47%
 
 
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(unaudited)
           
(In thousands)  
  Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
BALANCE SHEETS 2011 2010 2010 2010 2010
           
ASSETS          
Cash and due from banks  $ 18,542  $ 23,413  $ 21,125  $ 13,711  $ 13,548
Federal funds sold  1,464  3,153  1,599  30  2,199
Interest-bearing deposits  187,556  268,853  35,588  66,347  125,822
Debt and equity investments  496,419  373,824  274,855  273,021  280,329
Loans held for sale  3,142  5,640  5,910  2,518  1,517
           
Portfolio loans not covered under FDIC loss share  1,761,034  1,766,351  1,796,637  1,760,461  1,786,097
Portfolio loans covered under FDIC loss share  191,447  126,711  134,207  11,776  13,127
Total portfolio loans  1,952,481  1,893,062  1,930,844  1,772,237  1,799,224
Less allowance for loan losses  42,822  42,759  46,999  45,258  44,079
Net loans  1,909,659  1,850,303  1,883,845  1,726,979  1,755,145
           
Other real estate not covered under FDIC loss share  28,443  25,373  26,937  23,606  18,669
Other real estate covered under FDIC loss share  22,862  10,835  7,748  2,279  2,279
Premises and equipment, net  20,035  20,499  21,024  21,169  21,697
State tax credits, held for sale  59,928  61,148  61,007  60,134  52,067
FDIC loss share receivable  103,529  88,292  88,676  5,922  10,563
Goodwill  3,879  2,064  2,064  2,064  2,064
Core deposit intangible  1,921  1,223  1,322  1,423  1,531
Other assets  67,937  71,220  72,544  73,526  73,975
Total assets  $ 2,925,316  $ 2,805,840  $ 2,504,244  $ 2,272,729  $ 2,361,405
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Noninterest-bearing deposits  $ 448,012  $ 366,086  $ 304,221  $ 293,619  $ 300,835
Interest-bearing deposits  1,982,418  1,931,635  1,735,649  1,528,204  1,603,219
Total deposits  2,430,430  2,297,721  2,039,870  1,821,823  1,904,054
Subordinated debentures  85,081  85,081  85,081  85,081  85,081
FHLB advances  107,300  107,300  122,300  123,100  128,100
Federal funds purchased  --   --   5,000  --   -- 
Other borrowings  97,898  119,333  58,196  56,681  60,438
Other liabilities  13,592  13,057  13,217  9,172  8,498
Total liabilities  2,734,301  2,622,492  2,323,664  2,095,857  2,186,171
Shareholders' equity  191,015  183,348  180,580  176,872  175,234
Total liabilities and shareholders' equity  $ 2,925,316  $ 2,805,840  $ 2,504,244  $ 2,272,729  $ 2,361,405
 
 
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(unaudited)
           
(In thousands, except per share data) For the Quarter Ended
  Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
  2011 2010 2010 2010 2010
EARNINGS SUMMARY          
Net interest income  $ 26,738  $ 28,109  $ 24,290  $ 18,602  $ 18,623
Provision for loan losses  3,600  3,325  7,650  8,960  13,800
Wealth Management revenue  1,683  2,489  1,326  1,302  1,297
Noninterest income  3,280  723  4,725  3,739  2,759
Noninterest expense  17,465  19,649  15,458  14,146  13,655
Income (loss) before income tax  10,636  8,347  7,233  537  (4,776)
Net income (loss)   7,079  6,426  4,971  737  (3,014)
Net income (loss) available to common shareholders  6,453  5,804  4,353  122  (3,626)
Diluted earnings (loss) per share  $ 0.42  $ 0.38  $ 0.29  $ 0.01  $ (0.25)
Return on average common equity 16.82% 14.95% 11.61% 0.34%  (10.26%)
Net interest rate margin (fully tax equivalent) 4.19% 4.70% 4.31% 3.46% 3.47%
Efficiency ratio  55.09% 62.73% 50.95% 59.84% 60.21%
           
MARKET DATA          
Book value per common share  $ 10.60  $ 10.13  $ 9.98  $ 9.74  $ 9.65
Tangible book value per common share  $ 10.21  $ 9.91  $ 9.75  $ 9.51  $ 9.40
Market value per share  $ 14.07  $ 10.46  $ 9.30  $ 9.64  $ 11.06
Period end common shares outstanding  14,941  14,889  14,854  14,854  14,852
Average basic common shares  14,920  14,856  14,854  14,854  14,418
Average diluted common shares  16,375  16,296  16,293  14,855  14,418
           
ASSET QUALITY          
Net charge-offs  $ 3,538  $ 7,564  $ 5,909  $ 7,781  $ 12,716
Nonperforming loans  $ 43,487  $ 46,357  $ 51,955  $ 46,550  $ 55,785
Nonperforming loans to total loans 2.23% 2.45% 2.69% 2.63% 3.10%
Nonperforming assets to total assets* 2.48% 2.59% 3.18% 3.12% 3.19%
Allowance for loan losses to total loans 2.19% 2.26% 2.43% 2.55% 2.45%
Net charge-offs to average loans (annualized) 0.73% 1.57% 1.23% 1.76% 2.83%
           
CAPITAL          
Average common equity to average assets 5.37% 5.83% 5.96% 6.18% 6.14%
Tier 1 capital to risk-weighted assets 12.16% 11.97% 11.80% 11.93% 11.78%
Total capital to risk-weighted assets 14.34% 14.30% 14.19% 14.41% 14.29%
Tier 1 common equity to risk-weighted assets 7.51% 7.37% 7.19% 7.22% 7.16%
Tangible common equity to tangible assets 5.22% 5.26% 5.79% 6.22% 5.92%
           
AVERAGE BALANCES          
Portfolio loans not covered under FDIC loss share  $ 1,769,401  $ 1,780,890  $ 1,764,289  $ 1,762,250  $ 1,807,255
Portfolio loans covered under FDIC loss share  190,625  128,412  135,204  12,313  13,012
Earning assets  2,616,711  2,394,683  2,260,308  2,186,375  2,206,302
Total assets  2,896,285  2,644,952  2,494,148  2,342,523  2,336,788
Deposits  2,391,008  2,169,853  2,008,720  1,889,947  1,895,937
Shareholders' equity  188,187  186,453  180,984  176,785  175,223
           
LOAN PORTFOLIO          
Commercial and industrial  $ 612,970  $ 593,938  $ 592,554  $ 545,177  $ 551,351
Commercial real estate  780,764  776,268  792,510  793,869  799,846
Construction real estate  176,249  190,285  201,298  205,501  213,253
Residential real estate  174,405  189,484  195,762  198,096  204,544
Consumer and other  16,646  16,376  14,513  17,818  17,103
Portfolio loans covered under FDIC loss share  191,447  126,711  134,207  11,776  13,127
Total loan portfolio  $ 1,952,481  $ 1,893,062  $ 1,930,844  $ 1,772,237  $ 1,799,224
           
DEPOSIT PORTFOLIO          
Noninterest-bearing accounts  $ 448,012  $ 366,086  $ 304,221  $ 293,619  $ 300,835
Interest-bearing transaction accounts  198,152  204,687  187,426  198,747  203,006
Money market and savings accounts  952,798  865,703  714,498  687,116  640,504
Certificates of deposit  831,468  861,245  833,725  642,341  759,709
Total deposit portfolio  $ 2,430,430  $ 2,297,721  $ 2,039,870  $ 1,821,823  $ 1,904,054
           
*Excludes ORE covered by FDIC loss share agreements, except for their inclusion in total assets    
 
 
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(unaudited)
           
(In thousands) For the Quarter Ended
  Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
  2011 2010 2010 2010 2010
YIELDS (fully tax equivalent)          
Loans not covered under FDIC loss share 5.49% 5.45% 5.49% 5.56% 5.59%
Loans covered under FDIC loss share 16.81% 29.72% 17.48% 14.48% 16.92%
Total portfolio loans 6.59% 7.08% 6.34% 5.62% 5.67%
Securities 2.70% 2.60% 2.75% 2.85% 2.76%
Federal funds sold 0.26% 0.26% 0.30% 0.31% 0.36%
Yield on earning assets 5.40% 6.01% 5.67% 4.95% 5.06%
Interest-bearing deposits 1.16% 1.21% 1.24% 1.44% 1.56%
Subordinated debt 5.34% 5.71% 5.88% 5.84% 5.86%
Borrowed funds 1.89% 2.32% 2.29% 2.55% 2.74%
Cost of paying liabilities 1.39% 1.49% 1.54% 1.75% 1.87%
Net interest spread 4.01% 4.52% 4.13% 3.20% 3.19%
Net interest rate margin 4.19% 4.70% 4.31% 3.46% 3.47%
           
WEALTH MANAGEMENT          
Trust Assets under management  $ 875,437  $ 796,190  $ 741,929  $ 722,895  $ 773,069
Trust Assets under administration  1,600,471  1,498,987  1,371,214  1,230,827  1,320,714
           
RECONCILIATION OF U.S. GAAP FINANCIAL MEASURES        
PRE-TAX INCOME (LOSS) TO PRE-TAX, PRE-PROVISION INCOME      
  For the Quarter Ended
  Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
  2011 2010 2010 2010 2010
Pre-tax income (loss)  $ 10,636  $ 8,347  $ 7,233  $ 537  $ (4,776)
Sales and fair value writedowns of other real estate  19  2,683  1,606  678  586
Sale of securities  (174)  (781)  (124)  (525)  (557)
Retention payment  --   --   --   --   -- 
Income (loss) before income tax  10,481  10,249  8,715  690  (4,747)
Provision for loan losses  3,600  3,325  7,650  8,960  13,800
Pre-tax, pre-provision income   $ 14,081  $ 13,574  $ 16,365  $ 9,650  $ 9,053
           
TIER 1 COMMON EQUITY TO RISK-WEIGHTED ASSETS        
Shareholders' equity  $ 191,015  $ 183,348  $ 180,580  $ 176,872  $ 175,234
Less: Goodwill  (3,879)  (2,064)  (2,064)  (2,064)  (2,064)
Less: Intangible assets  (1,921)  (1,223)  (1,322)  (1,423)  (1,531)
Less: Unrealized gains; Plus: Unrealized Losses  (244)  573  (2,133)  (2,675)  (1,114)
Plus: Qualifying trust preferred securities  62,398  60,448  59,525  58,319  57,773
Other  1,352  747  748  718  718
Tier 1 capital  $ 248,721  $ 241,829  $ 235,334  $ 229,747  $ 229,016
Less: Preferred stock  (32,707)  (32,519)  (32,334)  (32,153)  (31,976)
Less: Qualifying trust preferred securities  (62,398)  (60,448)  (59,525)  (58,319)  (57,773)
Tier 1 common equity  $ 153,616  $ 148,862  $ 143,475  $ 139,275  $ 139,267
           
Total risk-weighted assets determined in accordance with prescribed regulatory requirements  $ 2,045,886  $ 2,019,885  $ 1,994,802  $ 1,927,769  $ 1,945,311
Tier 1 common equity to risk-weighted assets 7.51% 7.37% 7.19% 7.22% 7.16%
           
SHAREHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders' equity  $ 191,015  $ 183,348  $ 180,580  $ 176,872  $ 175,234
Less: Preferred stock  (32,707)  (32,519)  (32,334)  (32,153)  (31,976)
Less: Goodwill  (3,879)  (2,064)  (2,064)  (2,064)  (2,064)
Less: Intangible assets  (1,921)  (1,223)  (1,322)  (1,423)  (1,531)
Tangible common equity  $ 152,508  $ 147,542  $ 144,860  $ 141,232  $ 139,663
Total assets  $ 2,925,316  $ 2,805,840  $ 2,504,244  $ 2,272,729  $ 2,361,405
Less: Goodwill  (3,879)  (2,064)  (2,064)  (2,064)  (2,064)
Less: Intangible assets  (1,921)  (1,223)  (1,322)  (1,423)  (1,531)
Tangible assets  $ 2,919,516  $ 2,802,553  $ 2,500,858  $ 2,269,242  $ 2,357,810
Tangible common equity to tangible assets 5.22% 5.26% 5.79% 6.22% 5.92%
CONTACT: Jerry Mueller
         Senior Vice President
         (314) 512-7251
         Ann Marie Mayuga
         AMM Communications
         (314) 485-9499

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