Market Overview

Enterprise Financial Reports Third Quarter 2012 Results

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  • Third quarter net income of $7.9 million or $0.39 per diluted share, up 36% and 34%, respectively, over prior year
  • Commercial & Industrial loans grow 5% over linked quarter and 25% over prior year period
  • Nonperforming assets decrease 36% from one year ago to 1.40% of total assets
  • Net interest rate margin rises to 5.21% compared to 3.79% a year ago
  • Noninterest-bearing demand deposits up 11% over prior year period

ST. LOUIS, Oct. 25, 2012 (GLOBE NEWSWIRE) -- Enterprise Financial Services Corp (Nasdaq: EFSC) (the "Company") reported net income of $7.9 million for the quarter ended September 30, 2012, a 36% increase, compared to net income of $5.8 million for the prior year period. After deducting dividends on preferred stock, the Company reported net income of $0.39 per diluted share for the third quarter of 2012, a 34% increase, compared to net income of $0.29 per diluted share for the third quarter of 2011.

Peter Benoist, President and CEO, commented, "The positive trends in our core business gained momentum through the third quarter. The Company continues to demonstrate its ability to grow loans organically, with particular strength in Commercial & Industrial ("C&I") loans, which have increased to 44% of our portfolio. This growth is diverse and broad-based, generated by our traditionally effective sales efforts, successful recruiting initiatives, niche lending programs and our new commercial finance unit."

"The quarter was also marked by substantial progress in improving asset quality, noted Benoist. "We reduced nonperforming loans by 21% and Noncovered Other real estate by 28% in the third quarter alone. Our nonperforming asset ratio has now dropped to 1.40%. We anticipate a further reduction in nonperforming assets in the fourth quarter, which will likely be accompanied by higher reported loan losses and losses on sale of Other real estate."

Benoist continued, "Our FDIC acquisitions again contributed significantly to our earnings results and capital account, producing another $6.6 million in net revenue in the quarter. This included the effect of an increased provision expense of $11 million for covered assets. Our loss share protection reduced the net impact to $2.2 million, which was more than offset by increased accretion and accelerated loan payments. Since our first FDIC acquisition in December 2009, covered assets have added almost $60 million in net revenue to Enterprise."

Banking Segment

Deposits

Total deposits at September 30, 2012 were $2.6 billion, a decrease of $53.3 million, or 2%, from June 30, 2012 and $266.3 million, or 9% from the prior year period. The decrease in deposits from the linked quarter was attributable to a 9% reduction in certificates of deposit. The year over year decrease in deposits was largely comprised of a 32% reduction in higher cost certificates of deposit as the Company has planned to manage down its cost of funds.

Noninterest-bearing demand deposits declined $2.9 million in the linked quarter but increased $63.8 million, or 11%, from the prior year period and represented 24% of total deposits at September 30, 2012, up from 20% at September 30, 2011.

Loans not covered under FDIC loss share agreements ("Non-covered loans")

Portfolio loans totaled $2.0 billion at September 30, 2012, increasing $38.2 million, or 2%, in the third quarter of 2012.

The Company, which historically has been a strong C&I lender, posted a $39.0 million, or 5%, increase in C&I loans during the third quarter, the ninth consecutive quarter of growth in that lending category. C&I loans represented 44% of the Company's loan portfolio at September 30, 2012.  

On a year over year basis, portfolio loans increased $119.2 million, or 6%. Of that increase, C&I loans increased $174.3 million, or 25%, since September 30, 2011, while Construction and Residential Real Estate loans decreased $37.2 million, or 11%, over the same time frame as the Company has planned to reduce its exposure to these sectors.

Asset quality for loans and other real estate not covered by loss share agreements

Nonperforming loans, including troubled debt restructurings of $4.7 million, were $32.1 million at September 30, 2012, a 21% reduction from $40.6 million at June 30, 2012 and a 33% decline from $48.0 million at September 30, 2011. During the quarter ended September 30, 2012, there were $9.8 million of additions to nonperforming loans, $4.0 million of charge-offs, $9.8 million of other principal reductions, and $4.5 million of assets transferred to other real estate. 

Nonperforming loans represented 1.61% of portfolio loans at September 30, 2012, versus 2.08% of portfolio loans at June 30, 2012, and 2.57% at September 30, 2011.

Nonperforming loans by portfolio class at September 30, 2012 were as follows: 

(in millions) Total portfolio Nonperforming % NPL
Construction, Real Estate/Land Acquisition & Development $146.2 $10.1 6.91%
Commercial Real Estate - Investor Owned 476.5 9.6 2.02%
Commercial Real Estate - Owner Occupied 325.4 5.6 1.72%
Residential Real Estate 146.9 3.9 2.65%
Commercial & Industrial 880.4 2.9 0.33%
Consumer & Other 11.7 —%
Total $1,987.1 $32.1 1.61%

Excluding non-accrual loans, portfolio loans that were 30-89 days delinquent at September 30, 2012 remained at low levels, representing 0.07% of the portfolio compared to 0.13% at June 30, 2012 and 0.03% of September 30, 2011.

Other real estate totaled $12.5 million at September 30, 2012, a decrease of $4.9 million from June 30, 2012. At September 30, 2011, other real estate totaled $21.4 million. During the third quarter of 2012, the Company sold $9.0 million of other real estate, resulting in a gain of $705,000.

Nonperforming assets as a percentage of total assets represented 1.40% of total assets at September 30, 2012 compared to 1.82% at June 30, 2012 and 2.07% at September 30, 2011.

Net charge-offs in the third quarter of 2012 were $3.1 million representing an annual rate of 0.64% of average loans, compared to net charge-offs of $1.4 million, an annualized rate of 0.28% of average loans, in the linked second quarter and $4.7 million, an annualized rate of 1.01% of average loans, in the third quarter of 2011. The Company expects fourth quarter net chargeoffs of up to $8 million as efforts continue to lower classified loan levels.

Provision for loan losses was $1.0 million in the third quarter of 2012, compared to $75,000 in the second quarter of 2012 and $5.4 million in the third quarter of 2011.   The lower loan loss provision in the third quarter of 2012 compared to the the third quarter of 2011 was due to a lower number of loan risk rating downgrades, and more favorable loss migration statistics from a year ago. The Company expects the fourth quarter provision to be $2 million to $4 million as the risk of further risk rating downgrades remains elevated, especially for certain real estate related credits.

The Company's allowance for loan losses was 1.72% of loans at September 30, 2012, representing 107% of nonperforming loans.

Loans and other real estate covered under FDIC loss share agreements

Loans covered under FDIC loss share agreements ("Covered loans") totaled $221.4 million at September 30, 2012, a decrease of $21.1 million, or 9%, from the linked second quarter primarily as a result of principal paydowns.

Other real estate at September 30, 2012 was reduced to $18.8 million, a 5% decrease from $19.8 million at June 30, 2012. During the third quarter of 2012, the Company sold $2.6 million of other real estate, resulting in a gain of $34,000.

The Company remeasures contractual and expected cashflows on a quarterly basis. When the remeasurement process results in a decrease in expected cash flows due to an increase in expected credit losses, impairment is recorded. Concurrently, the FDIC loss share receivable is increased to reflect anticipated future cash to be received from the FDIC. The amount of the increase is determined based on the specific loss share agreement, but is generally 80% of the losses. In the third quarter of 2012, impairments totaling $10.9 million were recorded for certain loan pools covered under loss share compared to $2.7 million in the third quarter of 2011. The charge was partially offset through noninterest income by an increase in the FDIC loss share receivable totaling approximately $8.7 million, reducing the net impact of the provision to $2.2 million.

Unplanned cash flows representing accelerated loan payoffs or paydowns are recognized as income, but also generally result in a decrease in the FDIC loss share receivable. These cash flows are, by their nature, unpredictable and can vary significantly period to period. Unplanned cash flows in the third quarter totaled $7.4 million, which were partially offset by a decrease in the FDIC loss share receivable.

The following table illustrates the net revenue contribution of covered assets for the most recent five quarters.  

  For the Quarter ended
(in thousands) September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
September 30,
2011
Accretion income $7,995 $7,155 $7,081 $6,841 $4,942
Accelerated cash flows 7,446 5,315 2,691 4,733 1,620
Other 103 106 130 29 4
Total interest income 15,544 12,576 9,902 11,603 6,566
Provision for loan losses (10,889) (206) (2,285) 144 (2,672)
Gain on sale of other real estate 34 769 1,173 144 588
Change in FDIC loss share receivable 1,912 (5,694) (2,956) (4,642) 1,513
Pre-tax net revenue $6,601 $7,445 $5,834 $7,249 $5,995

Net Interest Income

Net interest income for the banking segment in the third quarter increased $3.4 million from the linked second quarter, primarily due to higher accretion and accelerated cash flows in the Covered loans. On a year over year basis, net interest income increased $10.5 million, or 37%. Including the effect of parent company debt, the net interest rate margin was 5.21% for the third quarter of 2012, compared to 4.81% for the second quarter of 2012 and 3.79% in the third quarter of 2011.   In the third quarter of 2012, Covered loans yielded 26.51%, including effects of accelerated discount accretion due to cash flows on paid off Covered loans. Excluding the accelerated cash flow impacts, the Covered loans yielded 13.6% in the third quarter and are expected to yield 13% to 15% in the fourth quarter.

Absent Covered loans, and the related nonearning assets, the net interest rate margin was 3.42% for the third quarter of 2012 compared to 3.46% for the second quarter of 2012.

Wealth Management Segment

Fee income attributable to the Wealth Management segment includes Wealth Management revenue and income from state tax credit brokerage activities.   Third quarter Wealth Management revenues of $1.8 million were $166,000, or 8%, lower than the linked quarter and equal to the prior year period.

Trust assets under administration were $1.6 billion at September 30, 2012, compared to $1.6 billion at June 30, 2012 and $1.4 billion at September 30, 2011.

Gains from state tax credit brokerage activities, net of fair value marks on tax credit assets and related interest rate hedges, were $256,000 for the third quarter of 2012, compared to $587,000 for the linked quarter and $1,368,000 in the third quarter of 2011. Sales of state tax credits can vary by quarter depending on client demand.

Other Business Results

Total capital to risk-weighted assets was 14.12% at September 30, 2012 compared to 13.88% at June 30, 2012 and 13.70% at September 30, 2011. The tangible common equity ratio was 6.19% at September 30, 2012 versus 5.84% at June 30, 2012 and 4.88% at September 30, 2011. The Company's Tier 1 common equity ratio was 7.91% at September 30, 2012 compared to 7.62% at June 30, 2012 and 7.16% at September 30, 2011.    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.

Noninterest expenses were $21.3 million for the quarter ended September 30, 2012, compared to $21.4 million for the quarter ended June 30, 2012 and $18.3 million for the quarter ended September 30, 2011.   The increase over the prior year period was primarily due to increases in salaries and benefits, occupancy, data processing and other operating expenses related to the 2011 acquisitions.

The Company's efficiency ratio was 47.0% for the quarter ended September 30, 2012 compared to 61.2% for quarter ended June 30, 2012 and 51.6% for the prior year period. The decrease in the efficiency ratio is primarily a result of increases in non-interest income from the Change in FDIC loss share receivable. 

The Company will host a conference call at 2:30 p.m. CDT on Thursday, October 25, 2012. During the call, management will address the third quarter of 2012 results. 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 #29363261.) 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, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, 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 2011 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)  
           
  For the Quarter ended For the Nine Months ended  
  Sep 30,  Sep 30,  Sep 30,  Sep 30,   
(in thousands, except per share data) 2012 2011 2012 2011  
INCOME STATEMENTS          
NET INTEREST INCOME          
Total interest income  $ 42,874  $ 34,285  $ 120,118  $ 103,377  
Total interest expense  5,390  7,516  17,872  22,896  
Net interest income  37,484 26,769 102,246 80,481  
Provision for loan losses not covered under FDIC loss share  1,048 5,400 2,841 13,300  
Provision for loan losses covered under FDIC loss share  10,889 2,672 13,380 2,947  
Net interest income after provision for loan losses 25,547 18,697 86,025 64,234  
           
NONINTEREST INCOME          
Wealth Management revenue 1,825 1,832 5,525 5,173  
Deposit service charges 1,456 1,332 4,199 3,663  
Gain on sale of other real estate 739 517 3,152 1,039  
State tax credit activity, net 256 1,368 1,180 2,510  
Gain on sale of investment securities 768 1,156 1,448  
Change in FDIC loss share receivable  1,912  1,513  (6,738)  1,148  
Other income 1,644 1,396 4,186 2,926  
Total noninterest income 7,832 8,726 12,660 17,907  
           
NONINTEREST EXPENSE          
Employee compensation and benefits 11,441 9,329  32,956  26,282  
Occupancy 1,399 1,306  4,162  3,586  
Furniture and equipment 384 431  1,234  1,216  
Other 8,058 7,236  25,708  23,207  
Total noninterest expenses 21,282 18,302  64,060  54,291  
           
Income before income tax expense 12,097 9,121  34,625  27,850  
Income tax expense 4,167 3,289  11,744  9,633  
Net income 7,930 5,832  22,881  18,217  
Dividends on preferred stock  (648)  (632)  (1,933)  (1,888)  
Net income available to common shareholders  $ 7,282  $ 5,200  $ 20,948  $ 16,329  
           
Basic earnings per share  $ 0.41  $ 0.29  $ 1.17  $ 1.00  
Diluted earnings per share  $ 0.39  $ 0.29  $ 1.14  $ 0.98  
Return on average assets 0.91% 0.65% 0.87% 0.73%  
Return on average common equity 12.62% 10.39% 12.73% 12.61%  
Efficiency ratio 46.96% 51.56% 55.75% 55.18%  
Noninterest expenses to average assets 2.66% 2.28% 2.66% 2.42%  
           
YIELDS (fully tax equivalent)          
Loans not covered under FDIC loss share 5.00% 5.33% 5.13% 5.42%  
Loans covered under FDIC loss share 26.51% 10.16% 19.95% 13.94%  
Total portfolio loans 7.29% 5.91% 6.86% 6.29%  
Securities 2.01% 2.60% 2.00% 2.72%  
Federal funds sold 0.23% 0.27% 0.24% 0.26%  
Yield on interest-earning assets 5.96% 4.84% 5.62% 5.17%  
Interest-bearing deposits 0.72% 1.01% 0.79% 1.09%  
Subordinated debt 4.59% 5.26% 4.88% 5.30%  
Borrowed funds 1.49% 1.94% 1.65% 1.94%  
Cost of paying liabilities 0.95% 1.23% 1.02% 1.32%  
Net interest spread 5.01% 3.61% 4.60% 3.85%  
Net interest rate margin 5.21% 3.79% 4.79% 4.04%  
           
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
           
  At the Quarter ended
  Sep 30,  Jun 30,  Mar 31,  Dec 31,  Sep 30, 
(in thousands, except per share data) 2012 2012 2012 2011 2011
BALANCE SHEETS          
           
ASSETS          
Cash and due from banks  $ 28,964  $ 29,832  $ 27,595  $ 20,791  $ 26,015
Federal funds sold  30  58  77  143  2,371
Interest-bearing deposits  57,681  47,589  149,000  168,711  240,488
Debt and equity investments  626,719  614,237  520,642  607,709  477,131
Loans held for sale  8,245  4,928  5,813  6,494  5,076
           
Portfolio loans not covered under FDIC loss share  1,987,166  1,948,994  1,917,550  1,897,074  1,867,956
Less: Allowance for loan losses  34,222  36,304  37,596  37,989  42,883
Portfolio loans not covered under FDIC loss share, net  1,952,944  1,912,690  1,879,954  1,859,085  1,825,073
Portfolio loans covered under FDIC loss share, net of the allowance for loan losses  210,331  240,599  266,239  298,975  324,374
Portfolio loans, net  2,163,275  2,153,289  2,146,193  2,158,060  2,149,447
           
Other real estate not covered under FDIC loss share  12,549  17,443  19,655  17,217  21,370
Other real estate covered under FDIC loss share  18,810  19,832  25,725  36,471  51,193
Premises and equipment, net  21,469  21,739  21,543  18,986  18,976
State tax credits, held for sale  65,873  65,648  48,165  50,446  56,278
FDIC loss share receivable  75,851  88,436  172,497  184,554  194,216
Goodwill  30,334  30,334  30,334  30,334  30,334
Core deposit intangible  7,846  8,310  8,795  9,285  9,471
Other assets  76,046  81,459  69,120  68,578  66,418
Total assets  $ 3,193,692  $ 3,183,134  $ 3,245,154  $ 3,377,779  $ 3,348,784
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Noninterest-bearing deposits  $ 621,070  $ 623,956  $ 592,172  $ 585,479  $ 557,290
Interest-bearing deposits  1,929,863  1,980,317  2,111,985  2,205,874  2,259,972
Total deposits  2,550,933  2,604,273  2,704,157  2,791,353  2,817,262
Subordinated debentures  85,081  85,081  85,081  85,081  85,081
FHLB advances  126,000  90,500  87,000  102,000  102,000
Other borrowings  147,104  132,479  105,888  154,545  100,729
Other liabilities  17,058  14,913  17,012  5,235  9,241
Total liabilities  2,926,176  2,927,246  2,999,138  3,138,214  3,114,313
Shareholders' equity  267,516  255,888  246,016  239,565  234,471
Total liabilities and shareholders' equity  $ 3,193,692  $ 3,183,134  $ 3,245,154  $ 3,377,779  $ 3,348,784
           
           
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
           
  For the Quarter ended
  Sep 30,  Jun 30,  Mar 31,  Dec 31,  Sep 30, 
(in thousands, except per share data) 2012 2012 2012 2011 2011
EARNINGS SUMMARY          
Net interest income  $ 37,484  $ 34,133  $ 30,629  $ 32,204  $ 26,769
Provision for loan losses not covered under FDIC loss share  1,048  75  1,718  —   5,400
Provision for loan losses covered under FDIC loss share  10,889  206  2,285  (144)  2,672
Wealth Management revenue  1,825  1,991  1,709  1,668  1,832
Noninterest income  6,007  (1,146)  2,274  (1,067)  6,894
Noninterest expense  21,282  21,414  21,364  23,427  18,302
Income before income tax expense  12,097  13,283  9,245  9,522  9,121
Net income  7,930  8,766  6,185  7,206  5,832
Net income available to common shareholders  7,282  8,122  5,544  6,570  5,200
Diluted earnings per share  $ 0.39  $ 0.44  $ 0.31  $ 0.36  $ 0.29
Return on average common equity 12.62% 14.99% 10.54% 12.81% 10.39%
Net interest rate margin (fully tax equivalent) 5.21% 4.81% 4.33% 4.35% 3.79%
Efficiency ratio 46.96% 61.22% 61.73% 71.41% 51.56%
           
MARKET DATA          
Book value per common share  $ 13.00  $ 12.44  $ 11.94  $ 11.61  $ 11.35
Tangible book value per common share  $ 10.88  $ 10.28  $ 9.74  $ 9.38  $ 9.11
Market value per share  $ 13.60  $ 10.96  $ 11.74  $ 14.80  $ 13.59
Period end common shares outstanding  17,964  17,857  17,796  17,774  17,743
Average basic common shares  17,876  17,833  17,790  17,754  17,741
Average diluted common shares  19,415  19,286  19,243  19,226  19,202
           
ASSET QUALITY          
Net charge-offs  $ 3,130  $ 1,367  $ 2,111  $ 4,894  $ 4,674
Nonperforming loans 32,058 40,555 47,184 41,622 48,038
Nonperforming loans to total loans 1.61% 2.08% 2.46% 2.19% 2.57%
Nonperforming assets to total assets* 1.40% 1.82% 2.06% 1.74% 2.07%
Allowance for loan losses to total loans 1.72% 1.86% 1.96% 2.00% 2.30%
Net charge-offs to average loans (annualized) 0.64% 0.28% 0.45% 1.04% 1.01%
           
CAPITAL          
Tier 1 capital to risk-weighted assets 12.75% 12.51% 12.48% 12.40% 12.24%
Total capital to risk-weighted assets 14.12% 13.88% 13.85% 13.78% 13.70%
Tier 1 common equity to risk-weighted assets 7.91% 7.62% 7.46% 7.32% 7.16%
Tangible common equity to tangible assets 6.19% 5.84% 5.41% 4.99% 4.88%
           
AVERAGE BALANCES          
Portfolio loans not covered under FDIC loss share  $ 1,949,181  $ 1,931,903  $ 1,891,883  $ 1,872,282  $ 1,835,634
Portfolio loans covered under FDIC loss share  233,272  250,965  279,700  314,948  256,381
Loans held for sale  6,376  5,547  5,848  4,886  2,857
Earning assets  2,889,968  2,881,915  2,877,252  2,970,992  2,834,690
Total assets  3,187,999  3,214,013  3,266,856  3,385,845  3,190,490
Deposits  2,598,506  2,668,428  2,707,042  2,838,536  2,661,978
Shareholders' equity  263,363  251,491  244,944  236,548  231,538
           
LOAN PORTFOLIO          
Commercial and industrial  $ 880,394  $ 841,383  $ 792,055  $ 763,202  $ 706,117
Commercial real estate  801,880  801,983  806,997  811,570  818,578
Construction real estate  146,236  142,474  148,494  140,147  152,464
Residential real estate  146,940  149,410  157,706  171,034  177,871
Consumer and other  11,716  13,744  12,298  11,121  12,926
Portfolio loans covered under FDIC loss share  221,433  242,488  269,249  300,610  326,942
Total loan portfolio  $ 2,208,599  $ 2,191,482  $ 2,186,799  $ 2,197,684  $ 2,194,898
           
           
* Excludes ORE covered by FDIC shared-loss agreements, except for their inclusion in total assets.
           
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
           
  For the Quarter ended
  Sep 30,  Jun 30,  Mar 31,  Dec 31,  Sep 30, 
(in thousands) 2012 2012 2012 2011 2011
DEPOSIT PORTFOLIO          
Noninterest-bearing accounts  $ 621,070  $ 623,956  $ 592,172  $ 585,479  $ 557,290
Interest-bearing transaction accounts  259,902  275,288  265,604  253,504  241,815
Money market and savings accounts  1,056,768  1,027,655  1,126,756  1,135,449  1,117,232
Certificates of deposit  613,193  677,374  719,625  816,921  900,925
Total deposit portfolio  $ 2,550,933  $ 2,604,273  $ 2,704,157  $ 2,791,353  $ 2,817,262
           
YIELDS (fully tax equivalent)          
Loans not covered under FDIC loss share 5.00% 5.17% 5.23% 5.31% 5.33%
Loans covered under FDIC loss share 26.51% 20.15% 14.24% 14.62% 10.16%
Total portfolio loans 7.29% 6.89% 6.39% 6.65% 5.91%
Securities 2.01% 1.96% 2.04% 2.10% 2.60%
Federal funds sold 0.23% 0.23% 0.25% 0.24% 0.27%
Yield on interest-earning assets 5.96% 5.63% 5.25% 5.32% 4.84%
Interest-bearing deposits 0.72% 0.79% 0.84% 0.90% 1.01%
Subordinated debt 4.59% 4.63% 5.43% 5.32% 5.26%
Borrowed funds 1.49% 1.70% 1.76% 1.84% 1.94%
Cost of paying liabilities 0.95% 1.01% 1.08% 1.12% 1.23%
Net interest spread 5.01% 4.62% 4.17% 4.20% 3.61%
Net interest rate margin 5.21% 4.81% 4.33% 4.35% 3.79%
           
WEALTH MANAGEMENT          
Trust Assets under management  $ 846,532  $ 836,351  $ 840,081  $ 831,931  $ 790,129
Trust Assets under administration  1,637,278  1,601,441  1,666,943  1,602,969  1,439,947
           
           
ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
           
RECONCILIATIONS OF U.S. GAAP FINANCIAL MEASURES
           
  At the Quarter ended
  Sep 30,  Jun 30,  Mar 31,  Dec 31,  Sep 30, 
(In thousands) 2012 2012 2012 2011 2011
TIER 1 COMMON EQUITY TO RISK-WEIGHTED ASSETS
           
Shareholders' equity  $ 267,516  $ 255,888  $ 246,016  $ 239,565  $ 234,471
Less: Goodwill  (30,334)  (30,334)  (30,334)  (30,334)  (30,334)
Less: Intangible assets  (7,846)  (8,310)  (8,795)  (9,285)  (9,471)
Less: Unrealized gains  (9,388)  (6,140)  (4,744)  (3,602)  (4,718)
Plus: Qualifying trust preferred securities  80,100  80,100  80,100  79,874  78,177
Other  56  56  57  57  59
Tier 1 capital  $ 300,104  $ 291,260  $ 282,300  $ 276,275  $ 268,184
Less: Preferred stock  (33,914)  (33,703)  (33,496)  (33,293)  (33,094)
Less: Qualifying trust preferred securities  (80,100)  (80,100)  (80,100)  (79,874)  (78,177)
Tier 1 common equity  $ 186,090  $ 177,457  $ 168,704  $ 163,108  $ 156,913
           
Total risk weighted assets determined in accordance with prescribed regulatory requirements  $ 2,353,251  $ 2,327,624  $ 2,262,209  $ 2,227,958  $ 2,190,880
           
Tier 1 common equity to risk weighted assets 7.91% 7.62% 7.46% 7.32% 7.16%
           
SHAREHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
           
Shareholders' equity  $ 267,516  $ 255,888  $ 246,016  $ 239,565  $ 234,471
Less: Preferred stock  (33,914)  (33,703)  (33,496)  (33,293)  (33,094)
Less: Goodwill  (30,334)  (30,334)  (30,334)  (30,334)  (30,334)
Less: Intangible assets  (7,846)  (8,310)  (8,795)  (9,285)  (9,471)
Tangible common equity  $ 195,422  $ 183,541  $ 173,391  $ 166,653  $ 161,572
           
Total assets  $ 3,193,692  $ 3,183,134  $ 3,245,154  $ 3,377,779  $ 3,348,784
Less: Goodwill  (30,334)  (30,334)  (30,334)  (30,334)  (30,334)
Less: Intangible assets  (7,846)  (8,310)  (8,795)  (9,285)  (9,471)
Tangible assets  $ 3,155,512  $ 3,144,490  $ 3,206,025  $ 3,338,160  $ 3,308,979
           
Tangible common equity to tangible assets 6.19% 5.84% 5.41% 4.99% 4.88%
CONTACT: Jerry Mueller, Senior Vice President (314) 512-7251 Ann Marie Mayuga, AMM Communications (314) 485-9499
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