Exhibit 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
Kevin Eichner (314) 725-5500
Frank Sanfilippo (314) 725-5500, or
Melissa Sturges (816) 235-7733
ENTERPRISE FINANCIAL REPORTS 33.3% INCREASE IN EARNINGS PER
SHARE OVER PREVIOUS YEAR
Net interest income grows 12.3%, noninterest income grows 19.2%
St. Louis, April 21, 2003 – Enterprise Financial Services Corp (OTCBB: EFSC), the parent company of Enterprise Bank and Enterprise Trust, reported net income of $1.1 million or $0.12 per fully diluted share for the three months ended March 31, 2003. For the three months ended March 31, 2002, net income was $871,000 or $0.09 per fully diluted share. The reported earnings per fully diluted share for the first quarter represent a 33.3% increase over the same quarter in 2002.
“We are encouraged to begin 2003 with a strong performance,” said Kevin Eichner, President and CEO of Enterprise Financial. “The environment with the economy, war, and other issues has hardly been favorable, so we are particularly pleased to be able to post these earnings and growth numbers.”
Loans grew by 10% or $62 million since March 31, 2002 and ended the quarter at $712 million. This growth was funded by significant increases in deposits of $92 million or 14%. Net interest income for the first quarter of 2003 was $8.1 million, an $887,000 or 12.3% increase over the same period last year. The net interest rate margin increased to 4.08% from 3.92% due to a better overall earning asset mix and favorable repricing of core deposits.
Total noninterest income grew by 19.2% in the first quarter of 2003 versus the same period in 2002. This $286,000 increase was generated from increases in gains on the sale of mortgage loans, service charges, and securities gains. Heavy refinance volume in the home loan category continues to produce record gains on the sale of mortgage loans and expanded services provided to Enterprise Financial clients and increased deposit accounts drove the service charge gains. Trust and financial advisory performance was also strong in the first quarter of 2003, generating fee income of $589,000. Assets under management continue to grow significantly and were $986 million at March 31, 2003 versus $905 million at March 31, 2002.
-more-
Enterprise Financial Q1 2003 Earnings
First add
The provision for loan losses was $999,000 in the first quarter of 2003 compared to $590,000 in the same period of 2002. This increase was due to $424,000 of net charge-offs on loans during the period (versus $30,000 in the same period last year) and the need to support strong loan growth since the end of 2002. Gross charge-offs were $494,000 and nearly all of those relate to one problem loan relationship. The allowance for loan losses of $9.2 million at March 31, 2003 represents 1.29% of ending portfolio loans. This same ratio was 1.21% at March 31, 2002 and 1.27% at December 31, 2002. Our loan loss experience continues to compare favorably with peer institutions.
As previously announced, on April 4, 2003 Enterprise Bank sold its Humboldt, Chanute and Iola, Kan. branches to Emprise Financial Corporation based in Wichita, Kan. and will realize a $3.1 million pre-tax gain before associated expenses in the second quarter of 2003. Assets of $28.6 million and deposit liabilities of $48.9 million associated with these branches are shown as “held for sale” on Enterprise Financial’s balance sheet at March 31, 2003. This sale will allow for the redeployment of capital and other resources to Enterprise Financial’s more strategic urban markets in St. Louis and Kansas City, Mo.
Expense ratios continue to improve as reduced staffing levels, productivity increases, and business process improvements are implemented. Noninterest expense as a percentage of average assets improved from 3.44% in the first quarter of 2002 to 3.32% in the same quarter for 2003. The efficiency ratio improved from 76.60% to 71.52% in the same periods.
“Enterprise Financial continues to improve its performance in nearly every category. We are encouraged by our progress, the performance of our excellent people, and investors’ continued interest in our stock, which hit a new 52-week high of $14.05 in March and continues at this time to trade in the $13.00 to $14.00 range. This is an increase of over 40% since July 1 of last year,” said CEO Eichner.
Enterprise Financial operates commercial banking and wealth management businesses in metropolitan St. Louis and Kansas City, Mo., with a primary focus on serving the needs of privately-held businesses, their owners and other success-minded individuals.
Please refer to Enterprise Financial’s consolidated balance sheets as of March 31, 2003 and 2002 and consolidated statements of operations for the three months ended March 31, 2003 and 2002 attached for more details.
-more-
Enterprise Financial Q1 2003 Earnings
Second and final add
Readers should note that in addition to the historical information contained herein, this press release may contain 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. 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 economic conditions, risks associated with rapid increase or decrease in prevailing interest rates and competition from banks and other financial institutions, as well as those in Enterprise Financial’s 2002 Annual Report on Form 10-K.
###
ENTERPRISE FINANCIAL SERVICES CORP AND SUBSIDIARIES
Consolidated Statements of Operations (unaudited)
(Dollars in thousands, except per share data)
March 31, | ||||||
2003 | 2002 | |||||
Interest income: | ||||||
Interest and fees on loans | $ | 10,369 | $ | 10,462 | ||
Interest on debt securities: | ||||||
Taxable |
| 467 |
| 445 | ||
Nontaxable |
| 1 | ||||
Interest on federal funds sold |
| 38 |
| 92 | ||
Interest on interest-bearing deposits |
| — |
| 17 | ||
Dividends on equity securities |
| 15 |
| 12 | ||
Total interest income |
| 10,889 |
| 11,029 | ||
Interest expense: | ||||||
Interest-bearing transaction accounts |
| 52 |
| 68 | ||
Money market accounts |
| 927 |
| 1,274 | ||
Savings |
| 15 |
| 21 | ||
Certificates of deposit: | ||||||
$100,000 and over |
| 668 |
| 829 | ||
Other |
| 563 |
| 1,211 | ||
Guaranteed preferred beneficial interests in subordinated debentures |
| 309 |
| 259 | ||
Notes payable and other borrowed funds |
| 301 |
| 200 | ||
Total interest expense |
| 2,835 |
| 3,862 | ||
Net interest income |
| 8,054 |
| 7,167 | ||
Provision for loan losses |
| 999 |
| 590 | ||
Net interest income after provision for loan losses |
| 7,055 |
| 6,577 | ||
Noninterest income: | ||||||
Service charges on deposit accounts |
| 487 |
| 412 | ||
Trust and financial advisory income |
| 589 |
| 629 | ||
Other service charges and fee income |
| 96 |
| 91 | ||
Gain on sale of mortgage loans |
| 528 |
| 360 | ||
Gain on sale of securities |
| 78 |
| — | ||
Total noninterest income |
| 1,778 |
| 1,492 | ||
Noninterest expense: | ||||||
Salaries |
| 3,763 |
| 3,460 | ||
Payroll taxes and employee benefits |
| 714 |
| 690 | ||
Occupancy |
| 476 |
| 458 | ||
Furniture and equipment |
| 221 |
| 252 | ||
Data processing |
| 242 |
| 253 | ||
Other |
| 1,616 |
| 1,520 | ||
Total noninterest expense |
| 7,032 |
| 6,633 | ||
Income before income tax expense |
| 1,801 |
| 1,436 | ||
Income tax expense |
| 666 |
| 565 | ||
Net income | $ | 1,135 | $ | 871 | ||
Per share amounts | ||||||
Basic earnings per share |
| 0.12 |
| 0.09 | ||
Basic weighted average common shares outstanding |
| 9,520,631 |
| 9,298,749 | ||
Diluted earnings per share |
| 0.12 |
| 0.09 | ||
Diluted weighted average common shares outstanding |
| 9,825,620 |
| 9,577,312 |
ENTERPRISE FINANCIAL SERVICES CORP AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
(Dollars in thousands, except per share data)
March 31, | |||||||
2003 | 2002 | ||||||
Assets | |||||||
Cash and due from banks | $ | 42,440 | $ | 25,492 |
| ||
Federal funds sold |
| 30,828 |
| 11,745 |
| ||
Interest-bearing deposits |
| 93 |
| 379 |
| ||
Investments in debt and equity securities: | |||||||
Available for sale, at estimated fair value |
| 69,365 |
| 47,739 |
| ||
Held to maturity, at amortized cost (estimated fair value of $12 at March 31, 2003 and $13 at March 31, 2002) |
| 12 |
| 15 |
| ||
Total investments in debt and equity securities |
| 69,377 |
| 47,754 |
| ||
Loans held for sale |
| 3,868 |
| 2,628 |
| ||
Loans, less unearned loan fees |
| 712,154 |
| 650,090 |
| ||
Less allowance for loan losses |
| 9,175 |
| 7,856 |
| ||
Loans, net |
| 702,979 |
| 642,234 |
| ||
Other real estate owned |
| 450 |
| 138 |
| ||
Fixed assets, net |
| 7,427 |
| 8,611 |
| ||
Accrued interest receivable |
| 3,656 |
| 3,749 |
| ||
Goodwill |
| 2,087 |
| 2,087 |
| ||
Assets held for sale |
| 28,633 |
| 38,398 |
| ||
Prepaid expenses and other assets |
| 10,459 |
| 6,189 |
| ||
Total assets | $ | 902,297 | $ | 789,404 |
| ||
Liabilities and Shareholders’ Equity | |||||||
Deposits: | |||||||
Demand | $ | 165,465 | $ | 114,698 |
| ||
Interest-bearing transaction accounts |
| 54,286 |
| 43,838 |
| ||
Money market accounts |
| 347,500 |
| 328,153 |
| ||
Savings |
| 3,673 |
| 3,299 |
| ||
Certificates of deposit: | |||||||
$100,000 and over |
| 117,203 |
| 77,076 |
| ||
Other |
| 52,053 |
| 81,015 |
| ||
Total deposits |
| 740,180 |
| 648,079 |
| ||
Guaranteed preferred beneficial interests in subordinated debentures |
| 15,000 |
| 11,000 |
| ||
Federal Home Loan Bank advances |
| 29,433 |
| 15,509 |
| ||
Notes payable and other borrowings |
| 2,459 |
| 1,867 |
| ||
Accrued interest payable |
| 1,269 |
| 1,610 |
| ||
Liabilities held for sale |
| 48,862 |
| 56,011 |
| ||
Accounts payable and accrued expenses |
| 4,941 |
| 2,757 |
| ||
Total liabilities |
| 842,144 |
| 736,833 |
| ||
Shareholders’ equity: | |||||||
Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding 9,538,416 shares at March 31, 2003 and 9,315,451 shares at March 31, 2002 |
| 95 |
| 93 |
| ||
Surplus |
| 38,867 |
| 37,619 |
| ||
Retained earnings |
| 19,618 |
| 15,039 |
| ||
Accumulated other comprehensive income |
| 1,573 |
| (180 | ) | ||
Total shareholders’ equity |
| 60,153 |
| 52,571 |
| ||
Total liabilities and shareholders’ equity | $ | 902,297 | $ | 789,404 |
| ||