Exhibit 99.1
For more information contact:
Jerry Mueller, Senior Vice President (314) 512-7251
Ann Marie Mayuga, AMM Communications (314) 485-4390
ENTERPRISE FINANCIAL REPORTS FIRST QUARTER 2010 RESULTS |
- Pre-tax, pre-provision operating earnings up 23% over prior year period
- First quarter net loss of $3.0 million or $0.25 per fully diluted share
- Core deposits increase 19% over prior year
- Net interest income increases 9% over prior year period and 4% over linked quarter
- Company completes $15 million private common stock offering
- Company recruits three St. Louis sales executives
St. Louis, April 20, 2010. Enterprise Financial Services Corp (NASDAQ: EFSC) reported a net loss from continuing operations of $3.0 million, or $0.25 per fully diluted share after deducting dividends on preferred stock, compared to a net loss from continuing operations of $51.8 million, or $4.09 per share, for the prior year period. The first quarter 2010 net loss was attributable to $13.8 million in loan loss provision. The net loss reported for the first quarter of 2009 was driven by $16.5 million in loan loss provision and a $45.4 million non-cash accounting charge to eliminate banking segment goodwill.
Pre-tax, pre-provision income from continuing operations was $9.1 million in the first quarter of 2010, 23% higher than the comparable figure in the first quarter of 2009 and 21% higher than in the linked fourth quarter. Pre-tax, pre-provision income from continuing operations, which is a non-GAAP (Generally Accepted Accounting Principles) financial measure, is presented because the Company believes adjusting its results to exclude discontinued operations, loan loss provision expense, impairment charges, special FDIC assessments and unusual gains or losses 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 from continuing operations is provided in the attached tables.
Peter Benoist, President and CEO of Enterprise Financial, commented, “Our pre-tax, pre-provision operating earnings increased substantially on both a linked quarter and year-over-year basis. Core deposits continue to grow and we are seeing improved net interest margins as we increase loan yields and effectively manage down our cost of funds. Additionally, we’re encouraged by the linked quarter increase in wealth management revenues. This intrinsic earning power enables us to capitalize on growth opportunities, as shown by our recent success in recruiting talented executives, our Arizona acquisition and common equity raise.”
Benoist continued, “The first quarter increase in nonperforming loans, following three consecutive quarters of relative stability, reflected significant deterioration of the commercial real estate markets as vacancy rates remain high in the face of continued high unemployment. The increase in provision for the quarter was driven by continuing declines in the value of the underlying collateral of several large commercial and residential real estate loans. We continue to maintain an aggressive posture in identifying and recognizing risks inherent in the current real estate environment. While housing values are firming, we’re not yet seeing stabilization in residential lot and investor-owned commercial real estate valuations. However, our commercial and industrial and owner-occupied commercial real estate segments, which represent half of our loan portfolio, continue to perform well.”
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Banking Line of Business
Deposits and Liquidity
The Company continues to maintain strong liquidity and core funding positions. Core deposits increased $284 million, or 19%, over the prior year period. Noninterest bearing demand deposits grew 26% year-over-year. Core deposits include $148 million in certificates of deposit sold to bank clients through the CDARS program. Brokered CDs represented only 7% of total deposits at March 31, 2010, compared to 15% at March 31, 2009.
Loans
Portfolio loans decreased $164 million, or 8% from a year ago, excluding the effects of the fourth quarter 2009 derecognition of $229 million in loan participations from the balance sheet. Including the derecognition of the loan participations, portfolio loans decreased $391 million from the previous year. Although loan demand remains soft as local markets continue to be impacted by the recession, the Company anticipates modest growth in loans over the course of the year.
Approximately $313 million, or 17% of the Company’s total loan portfolio, represented real estate that was “owner-occupied” by commercial and industrial businesses. Investor-owned commercial real estate loans represented approximately 26% of the Company’s total loan portfolio at the end of the first quarter 2010.
The Company’s exposure to land acquisition, development and construction lending was 12% of total loans at March 31, 2010, compared to 18% at March 31, 2009 and 12% at year end 2009.
Asset Quality
Nonperforming loans totaled $55.8 million for the first quarter of 2010, an increase of $1.4 million from the prior year period, and an increase of $17.3 million from year end 2009. The majority of the increase in nonperforming loans was represented by a $5 million residential condominium project and a $5 million retail development in St. Louis and a $2 million office building in Kansas City. Nonperforming loans represented 3.10% of total loans at March 31, 2010, compared to 2.48% at March 31, 2009 and 2.10% at December 31, 2009.
Nonperforming loans by segment at March 31, 2010 were as follows (in millions):
| | Total portfolio | | Non-performing | | % NPL |
| Construction, Real Estate/Land | | | | | | | | | |
| Acquisition & Development | | $ | 214.9 | | $ | 20.1 | | 9.4 | % |
| Commercial Real Estate – investor owned | | | 465.0 | | | 20.6 | | 4.4 | |
| Commercial Real Estate – owner occupied | | | 342.3 | | | 5.9 | | 1.7 | |
| Residential Real Estate | | | 207.2 | | | 6.4 | | 3.1 | |
| Commercial & Industrial | | | 553.5 | | | 2.7 | | 0.5 | |
| Consumer & Other | | | 17.4 | | | 0.1 | | 0.5 | |
| Total | | $ | 1,800.3 | | $ | 55.8 | | 3.10 | % |
Commercial and industrial and owner-occupied real estate loans, which represent 50% of the Company’s total loan portfolio, continue to perform relatively well.
Other real estate at March 31, 2010 was $21.1 million, up $7.8 million from March 31, 2009 and down $4.1 million from December 31, 2009. No single foreclosed property represented more than $1.8 million. Other real estate includes $2.4 million of other real estate acquired through the acquisition of Valley Capital Bank in Arizona in December 2009.
The Company is aggressively marketing its foreclosed real estate. During the first quarter, the Company sold $9.2 million in other real estate at a loss of $12,000. At March 31, 2010, other real estate was comprised of 35% residential lots, 22% completed homes and 43% commercial property.
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Net chargeoffs in the first quarter were $12.7 million, representing an annual rate of 2.83% of average loans. Net chargeoffs were approximately two-thirds investor-owned commercial real estate loans and one-third land development loans. By comparison, net chargeoffs were $8.0 million, or 1.47% of average loans, in the first quarter of 2009. Net chargeoffs for the linked fourth quarter of 2009 were $9.0 million, or 1.90% of average loans.
Provision for loan losses was $13.8 million in the first quarter, down from $16.5 million in the prior year first quarter and up from $8.4 million in the linked fourth quarter. The linked quarter increase in loan loss provision was largely attributable to increased reserves on impaired loans driven by current appraised values on commercial real estate that continued to decline, reflecting the distressed condition of that market.
The Company increased its allowance for loan losses to 2.45% of portfolio loans at March 31, 2010, representing 79% of total nonperforming loans. By comparison, the allowance for loan losses was 1.93% at March 31, 2009, representing 78% of nonperforming loans. At December 31, 2009, the Company’s loan loss allowance was 2.35% of loans, representing 112% of nonperforming loans.
Net Interest Income
Net interest income for the quarter ended March 31, 2010 for the banking segment was $20.1 million, up 9% over the prior year period and up 4% over the linked quarter.
Including the effect of parent company debt, the net interest rate margin increased 31 basis points to 3.46% for the quarter ended March 31, 2010, compared to 3.15% for the quarter ended December 31, 2009. The prior year first quarter net interest rate margin was 3.02%.
During the first quarter of 2010, the net interest rate margin improved as a result of reduced rates on maturing CD’s and money market account balances. The Company anticipates further modest improvement in net interest margin as liabilities reprice throughout the year.
Arizona Operations
In February, 2010, Enterprise Bank & Trust, the Company’s banking subsidiary, opened a new branch in the West Valley suburbs of Phoenix. The Company currently operates a loan production office in central Phoenix and plans to open another full-service branch in central Phoenix in the summer of 2010. The Company plans to close its branch in Mesa, Arizona, which was acquired in an FDIC-assisted acquisition in December, 2009. Total Arizona deposits were $24 million and total loans were $42 million at March 31, 2010. Loans at fair value covered under a loss sharing agreement with the FDIC were $14 million.
Wealth Management Line of Business
Fee income in the first quarter of 2010 from the Wealth Management line of business, including trust revenues and income from state tax credit brokerage activities, totaled $1.8 million, up 56% over the prior year period. A large portion of the increase was attributable to higher revenues from state tax credit brokerage activities in the first quarter of 2010.
Trust
Enterprise Trust revenues increased $90,000, or 7%, in the first quarter of 2010 over the comparable period in 2009 and $295,000, or 29% over the linked fourth quarter. Trust assets under administration increased 22% to $1.3 billion at March 31, 2010 largely due to market value increases.
State Tax Credit Brokerage
For the first quarter of 2010, state tax credit brokerage activities generated $518,000 in gains versus a $46,000 loss in the first quarter of 2009. State tax credit revenues for the first quarter of 2010 included $775,000 in gains from the sale of state tax credits, less a $257,000 loss in the fair value of tax credit assets and related interest rate hedges. By comparison, for the first quarter of 2009, the Company recorded $571,000 in gains from the sale of tax credits, offset by a $617,000 loss in fair value of tax credit assets and related interest rate hedges.
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Other Business Results
The Company recruited three top executives from one of its leading competitors in the St. Louis market to enhance business development and revenue growth. Bob Witterschein joined Enterprise as Executive Vice President and head of commercial banking. Andrew Baur and Kathy Gahr also joined the Company to bolster its personal and private banking sales operations.
Steve Marsh, Chairman and President of Enterprise Bank & Trust, said, “Superior talent has always been a hallmark of Enterprise. Throughout our history, when we’ve have the opportunity to attract individuals of Bob, Andrew and Kathy’s caliber, we’ve made those investments, demonstrating our intent to build Enterprise into a dominant player within our target markets.”
In January 2010, the Company completed a $15 million private offering of common equity. The Company’s tangible common equity ratio was 5.93% at March 31, 2010. A reconciliation of shareholders’ equity to tangible common equity and total assets to tangible assets is provided in the attached tables. The Company believes the tangible common equity ratio is an important financial measure of capital strength even though it is considered to be a non-GAAP measure. The Company continues to exceed regulatory standards for “well-capitalized” institutions. Total risk based capital was 14.27% of risk-weighted assets at March 31, 2010.
For the first quarter of 2010, noninterest expenses were $13.7 million, 9% higher than the prior year period, excluding the effects of the first quarter 2009 goodwill impairment charge, and essentially flat with the linked quarter. The increase in noninterest expenses was primarily attributable to higher FDIC and other insurance expenses, Arizona expansion and systems conversion costs.
The Company’s efficiency ratio at March 31, 2010 was 60.2%, versus 63.7% at March 31, 2009, excluding the effects of the goodwill impairment charge.
The income tax benefit for the first quarter of 2010 was $1.8 million, representing a 36.9% effective tax rate relative to the loss before income tax of $4.8 million. During the first quarter of 2010, the Company concluded that minor changes in the Company’s estimated pre-tax results and changes in projected permanent items produced significant variability in the estimated annual effective tax rate. As a result, the Company used the actual effective tax rate for the period as a basis for determining the income tax benefit.
Enterprise Financial operates commercial banking and wealth management businesses in metropolitan St. Louis, Kansas City and Phoenix. Enterprise 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 Enterprise Financial’s 2009 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.
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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, |
| 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| INCOME STATEMENTS | | | | | | | | | |
| NET INTEREST INCOME | | | | | | | | | | | | | | | | | | | |
| Total interest income | $ | 27,275 | | | $ | 28,012 | | | $ | 30,314 | | | $ | 30,341 | | | $ | 29,818 | |
| Total interest expense | | 8,652 | | | | 10,098 | | | | 12,931 | | | | 12,846 | | | | 12,970 | |
| Net interest income | | 18,623 | | | | 17,914 | | | | 17,383 | | | | 17,495 | | | | 16,848 | |
| Provision for loan losses | | 13,800 | | | | 8,400 | | | | 6,480 | | | | 9,073 | | | | 16,459 | |
| Net interest income after provision for loan losses | | 4,823 | | | | 9,514 | | | | 10,903 | | | | 8,422 | | | | 389 | |
| | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | |
| Wealth Management revenue | | 1,297 | | | | 1,002 | | | | 1,135 | | | | 1,180 | | | | 1,207 | |
| Deposit service charges | | 1,174 | | | | 1,221 | | | | 1,247 | | | | 1,249 | | | | 1,295 | |
| Sale of other real estate | | (12 | ) | | | (579 | ) | | | 86 | | | | (2 | ) | | | 59 | |
| State tax credit activity, net | | 518 | | | | 62 | | | | 911 | | | | 109 | | | | (46 | ) |
| Sale of securities | | 557 | | | | 3 | | | | - | | | | 636 | | | | 316 | |
| Sale of branch/charter | | - | | | | - | | | | - | | | | - | | | | - | |
| Gain on extinguishment of debt | | - | | | | 2,062 | | | | 5,326 | | | | - | | | | - | |
| Other income | | 522 | | | | 454 | | | | 368 | | | | 576 | | | | 1 | |
| Total noninterest income | | 4,056 | | | | 4,225 | | | | 9,073 | | | | 3,748 | | | | 2,832 | |
| | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | |
| Salaries and benefits | | 6,598 | | | | 6,617 | | | | 6,744 | | | | 6,334 | | | | 6,274 | |
| Occupancy | | 1,173 | | | | 1,189 | | | | 1,227 | | | | 1,197 | | | | 1,097 | |
| Furniture and equipment | | 370 | | | | 360 | | | | 377 | | | | 344 | | | | 344 | |
| Impairment charges | | - | | | | - | | | | - | | | | - | | | | 45,377 | |
| Other | | 5,514 | | | | 5,565 | | | | 4,626 | | | | 5,929 | | | | 4,825 | |
| Total noninterest expense | | 13,655 | | | | 13,731 | | | | 12,974 | | | | 13,804 | | | | 57,918 | |
| | |
| Income (loss) from continuing operations before income tax | | (4,776 | ) | | | 8 | | | | 7,002 | | | | (1,634 | ) | | | (54,697 | ) |
| Income tax (benefit) expense | | (1,762 | ) | | | (372 | ) | | | 2,245 | | | | (1,673 | ) | | | (2,850 | ) |
| Income (loss) from continuing operations | | (3,014 | ) | | | 380 | | | | 4,757 | | | | 39 | | | | (51,847 | ) |
| | |
| Loss from discontinued operations before income tax | | - | | | | (315 | ) | | | (129 | ) | | | (443 | ) | | | 478 | |
| Loss on disposal before income tax | | - | | | | (1,587 | ) | | | - | | | | - | | | | - | |
| Income tax (benefit) expense | | - | | | | (668 | ) | | | (59 | ) | | | (103 | ) | | | 118 | |
| Loss from discontinued operations | | - | | | | (1,234 | ) | | | (70 | ) | | | (340 | ) | | | 360 | |
| | |
| Net (loss) income | | (3,014 | ) | | | (854 | ) | | | 4,687 | | | | (301 | ) | | | (51,487 | ) |
| Dividends on preferred stock | | (612 | ) | | | (608 | ) | | | (605 | ) | | | (602 | ) | | | (599 | ) |
| Net income available to common shareholders | $ | (3,626 | ) | | $ | (1,462 | ) | | $ | 4,082 | | | $ | (903 | ) | | $ | (52,086 | ) |
| | |
| Basic earnings (loss) per share from continuing operations | $ | (0.25 | ) | | $ | (0.02 | ) | | $ | 0.33 | | | $ | (0.04 | ) | | $ | (4.09 | ) |
| Diluted earnings (loss) per share from continuing operations | $ | (0.25 | ) | | $ | (0.02 | ) | | $ | 0.32 | | | $ | (0.04 | ) | | $ | (4.09 | ) |
| Basic loss per share from discontinued operations | $ | - | | | $ | (0.10 | ) | | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | 0.03 | |
| Diluted loss per share from discontinued operations | $ | - | | | $ | (0.10 | ) | | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | 0.03 | |
| Basic (loss) earnings per share | $ | (0.25 | ) | | $ | (0.12 | ) | | $ | 0.32 | | | $ | (0.07 | ) | | $ | (4.06 | ) |
| Diluted (loss) earnings per share | $ | (0.25 | ) | | $ | (0.12 | ) | | $ | 0.31 | | | $ | (0.07 | ) | | $ | (4.06 | ) |
| | |
| Return on average assets | (0.63% | ) | | | (0.24% | ) | | | 0.65% | | | | (0.15% | ) | | | (8.44% | ) |
| Return on average common equity | (10.26% | ) | | | (4.25% | ) | | | 12.03% | | | | (2.78% | ) | | | (115.30% | ) |
| Efficiency ratio from continuing operations | | 60.21% | | | | 62.02% | | | | 49.04% | | | | 64.98% | | | | 294.30% | |
| Noninterest expense from continuing operations to average assets | | 2.37% | | | | 2.26% | | | | 2.06% | | | | 2.26% | | | | 9.39% | |
| | |
| YIELDS (fully tax equivalent) | | | | | | | | | | | | | | | | | | | |
| Loans | | 5.67% | | | | 5.54% | | | | 5.47% | | | | 5.45% | | | | 5.34% | |
| Securities | | 2.76% | | | | 2.78% | | | | 3.33% | | | | 3.63% | | | | 4.44% | |
| Federal funds sold | | 0.36% | | | | 0.21% | | | | 0.17% | | | | 0.51% | | | | 0.55% | |
| Yield on earning assets | | 5.05% | | | | 4.89% | | | | 5.12% | | | | 5.32% | | | | 5.27% | |
| �� Interest-bearing deposits | | 1.56% | | | | 1.72% | | | | 1.91% | | | | 2.03% | | | | 2.13% | |
| Subordinated debt | | 5.86% | | | | 5.80% | | | | 5.91% | | | | 6.19% | | | | 6.43% | |
| Borrowed funds | | 2.74% | | | | 3.19% | | | | 3.96% | | | | 3.51% | | | | 3.21% | |
| Cost of paying liabilities | | 1.87% | | | | 2.06% | | | | 2.48% | | | | 2.53% | | | | 2.56% | |
| Net interest spread | | 3.18% | | | | 2.83% | | | | 2.64% | | | | 2.79% | | | | 2.71% | |
| Net interest rate margin | | 3.46% | | | | 3.15% | | | | 2.97% | | | | 3.10% | | | | 3.02% | |
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ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(unaudited)
| (In thousands) | | | | | | | | | | | | | | |
| Mar 31, | | Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, |
| | 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| BALANCE SHEETS |
| ASSETS | | | | | | | | | | | | | | |
| Cash and due from banks | $ | 13,548 | | $ | 16,064 | | $ | 12,519 | | $ | 41,490 | | $ | 41,875 |
| Federal funds sold | | 2,199 | | | 7,472 | | | 1,771 | | | 4,252 | | | 3,310 |
| Interest-bearing deposits | | 125,822 | | | 83,430 | | | 82,651 | | | 2,893 | | | 5,852 |
| Debt and equity investments | | 280,329 | | | 295,650 | | | 211,069 | | | 169,309 | | | 123,773 |
| Loans held for sale | | 1,517 | | | 4,243 | | | 2,130 | | | 2,004 | | | 2,659 |
| |
| Portfolio loans | | 1,800,302 | | | 1,833,203 | | | 2,113,365 | | | 2,136,125 | | | 2,191,291 |
| Less allowance for loan losses | | 44,079 | | | 42,995 | | | 45,019 | | | 44,768 | | | 42,286 |
| Net loans | | 1,756,223 | | | 1,790,208 | | | 2,068,346 | | | 2,091,357 | | | 2,149,005 |
| |
| Other real estate | | 21,087 | | | 25,224 | | | 19,273 | | | 16,053 | | | 13,251 |
| Premises and equipment, net | | 21,697 | | | 22,301 | | | 23,042 | | | 23,872 | | | 24,608 |
| State tax credits, held for sale | | 52,067 | | | 51,258 | | | 47,950 | | | 42,609 | | | 43,474 |
| Goodwill | | 1,974 | | | 1,974 | | | 3,134 | | | 3,134 | | | 3,134 |
| Core deposit intangible | | 1,531 | | | 1,643 | | | 1,759 | | | 1,874 | | | 1,997 |
| Other amortizing intangibles | | - | | | - | | | 932 | | | 1,081 | | | 1,230 |
| Assets held for sale | | - | | | 4,000 | | | - | | | - | | | - |
| Other assets | | 83,411 | | | 62,188 | | | 44,049 | | | 46,337 | | | 43,476 |
| Total assets | $ | 2,361,405 | | $ | 2,365,655 | | $ | 2,518,625 | | $ | 2,446,265 | | $ | 2,457,644 |
| |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | $ | 300,835 | | $ | 289,658 | | $ | 257,901 | | $ | 238,139 | | $ | 238,449 |
| Interest-bearing deposits | | 1,603,219 | | | 1,651,758 | | | 1,595,730 | | | 1,521,125 | | | 1,507,110 |
| Total deposits | | 1,904,054 | | | 1,941,416 | | | 1,853,631 | | | 1,759,264 | | | 1,745,559 |
| Subordinated debentures | | 85,081 | | | 85,081 | | | 85,081 | | | 85,081 | | | 85,081 |
| FHLB advances | | 128,100 | | | 128,100 | | | 139,001 | | | 139,520 | | | 119,939 |
| Federal funds purchased | | - | | | - | | | - | | | 21,650 | | | 74,400 |
| Loan participations sold | | - | | | - | | | 229,012 | | | 236,110 | | | 231,027 |
| Other borrowings | | 60,438 | | | 39,338 | | | 36,097 | | | 33,824 | | | 31,767 |
| Other liabilities | | 8,498 | | | 7,808 | | | 9,132 | | | 9,366 | | | 7,073 |
| Total liabilities | | 2,186,171 | | | 2,201,743 | | | 2,351,954 | | | 2,284,815 | | | 2,294,846 |
| Shareholders' equity | | 175,234 | | | 163,912 | | | 166,671 | | | 161,450 | | | 162,798 |
| Total liabilities and shareholders' equity | $ | 2,361,405 | | $ | 2,365,655 | | $ | 2,518,625 | | $ | 2,446,265 | | $ | 2,457,644 |
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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, |
| 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| EARNINGS SUMMARY | | | | | | | | | | | | | | | | | | | |
| Net income (loss) from continuing operations | | | | | | | | | | | | | | | | | | | |
| Net interest income | $ | 18,623 | | | $ | 17,914 | | | $ | 17,383 | | | $ | 17,495 | | | $ | 16,848 | |
| Provision for loan losses | | 13,800 | | | | 8,400 | | | | 6,480 | | | | 9,073 | | | | 16,459 | |
| Wealth Management revenue | | 1,297 | | | | 1,002 | | | | 1,135 | | | | 1,180 | | | | 1,207 | |
| Noninterest income | | 2,759 | | | | 3,223 | | | | 7,938 | | | | 2,568 | | | | 1,625 | |
| Noninterest expense | | 13,655 | | | | 13,731 | | | | 12,974 | | | | 13,804 | | | | 57,918 | |
| (Loss) income before income tax | | (4,776 | ) | | | 8 | | | | 7,002 | | | | (1,634 | ) | | | (54,697 | ) |
| Net income (loss) from continuing operations | | (3,014 | ) | | | 380 | | | | 4,757 | | | | 39 | | | | (51,847 | ) |
| |
| Net (loss) income from discontinued operations | | - | | | | (1,234 | ) | | | (70 | ) | | | (340 | ) | | | 360 | |
| Net (loss) income available to common shareholders | | (3,626 | ) | | | (1,462 | ) | | | 4,082 | | | | (903 | ) | | | (52,086 | ) |
| Diluted (loss) earnings per share | $ | (0.25 | ) | | $ | (0.12 | ) | | $ | 0.31 | | | $ | (0.07 | ) | | $ | (4.06 | ) |
| Return on average common equity | | (10.26% | ) | | | (4.25% | ) | | | 12.03% | | | | (2.78% | ) | | | (115.30% | ) |
| Net interest rate margin (fully tax equivalent) | | 3.46% | | | | 3.15% | | | | 2.97% | | | | 3.10% | | | | 3.02% | |
| Efficiency ratio from continuing operations | | 60.21% | | | | 62.02% | | | | 49.04% | | | | 64.98% | | | | 294.30% | |
| |
| MARKET DATA | | | | | | | | | | | | | | | | | | | |
| Book value per common share | $ | 9.65 | | | $ | 10.25 | | | $ | 10.52 | | | $ | 10.13 | | | $ | 10.25 | |
| Tangible book value per common share | $ | 9.41 | | | $ | 9.97 | | | $ | 10.07 | | | $ | 9.65 | | | $ | 9.76 | |
| Market value per share | $ | 11.06 | | | $ | 7.71 | | | $ | 9.25 | | | $ | 9.09 | | | $ | 9.76 | |
| Period end common shares outstanding | | 14,852 | | | | 12,883 | | | | 12,834 | | | | 12,834 | | | | 12,833 | |
| Average basic common shares | | 14,418 | | | | 12,835 | | | | 12,834 | | | | 12,833 | | | | 12,828 | |
| Average diluted common shares | | 14,418 | | | | 12,835 | | | | 14,277 | | | | 12,833 | | | | 12,828 | |
| |
| ASSET QUALITY | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | $ | 12,716 | | | $ | 9,041 | | | $ | 6,229 | | | $ | 6,592 | | | $ | 7,981 | |
| Nonperforming loans | $ | 55,785 | | | $ | 38,540 | | | $ | 46,982 | | | $ | 54,699 | | | $ | 54,421 | |
| Nonperforming loans to total loans | | 3.10% | | | | 2.10% | | | | 2.22% | | | | 2.56% | | | | 2.48% | |
| Nonperforming assets to total assets | | 3.30% | | | | 2.70% | | | | 2.63% | | | | 2.89% | | | | 2.75% | |
| Allowance for loan losses to total loans | | 2.45% | | | | 2.35% | | | | 2.13% | | | | 2.10% | | | | 1.93% | |
| Net charge-offs to average loans (annualized) | | 2.83% | | | | 1.90% | | | | 1.16% | | | | 1.22% | | | | 1.47% | |
| |
| CAPITAL | | | | | | | | | | | | | | | | | | | |
| Average common equity to average assets | | 6.14% | | | | 5.67% | | | | 5.40% | | | | 5.31% | | | | 7.32% | |
| Tier 1 capital to risk-weighted assets | | 11.76% | | | | 10.67% | | | | 9.49% | | | | 8.47% | | | | 8.21% | |
| Total capital to risk-weighted assets | | 14.27% | | | | 13.32% | | | | 11.94% | | | | 13.13% | | | | 12.75% | |
| Tangible common equity to tangible assets | | 5.93% | | | | 5.44% | | | | 5.14% | | | | 5.08% | | | | 5.11% | |
| |
| AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | |
| Portfolio loans | $ | 1,821,345 | | | $ | 1,887,623 | | | $ | 2,121,518 | | | $ | 2,168,417 | | | $ | 2,208,519 | |
| Earning assets | | 2,207,381 | | | | 2,295,486 | | | | 2,386,575 | | | | 2,323,334 | | | | 2,333,247 | |
| Total assets | | 2,336,788 | | | | 2,406,403 | | | | 2,493,163 | | | | 2,447,974 | | | | 2,502,119 | |
| Deposits | | 1,895,937 | | | | 1,926,800 | | | | 1,826,229 | | | | 1,748,636 | | | | 1,716,291 | |
| Shareholders' equity | | 175,223 | | | | 168,143 | | | | 166,174 | | | | 161,426 | | | | 214,383 | |
| |
| LOAN PORTFOLIO | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | $ | 553,487 | | | $ | 558,016 | | | $ | 703,662 | | | $ | 673,154 | | | $ | 660,651 | |
| Commercial real estate | | 807,293 | | | | 820,191 | | | | 793,569 | | | | 846,079 | | | | 878,543 | |
| Construction real estate | | 214,900 | | | | 224,390 | | | | 376,882 | | | | 348,598 | | | | 366,908 | |
| Residential real estate | | 207,239 | | | | 214,066 | | | | 220,215 | | | | 245,296 | | | | 256,946 | |
| Consumer and other | | 17,383 | | | | 16,540 | | | | 19,037 | | | | 22,998 | | | | 28,243 | |
| Total loan portfolio | $ | 1,800,302 | | | $ | 1,833,203 | | | $ | 2,113,365 | | | $ | 2,136,125 | | | $ | 2,191,291 | |
| |
| DEPOSIT PORTFOLIO | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing accounts | $ | 300,835 | | | $ | 289,658 | | | $ | 257,901 | | | $ | 238,139 | | | $ | 238,449 | |
| Interest-bearing transaction accounts | | 203,006 | | | | 142,061 | | | | 121,935 | | | | 129,680 | | | | 129,389 | |
| Money market and savings accounts | | 640,504 | | | | 699,374 | | | | 635,607 | | | | 619,686 | | | | 630,744 | |
| Certificates of deposit | | 759,709 | | | | 810,323 | | | | 838,188 | | | | 771,759 | | | | 746,977 | |
| Total deposit portfolio | $ | 1,904,054 | | | $ | 1,941,417 | | | $ | 1,853,631 | | | $ | 1,759,264 | | | $ | 1,745,559 | |
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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, |
| | 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| YIELDS (fully tax equivalent) | | | | | | | | | | | | | | | |
| Loans | | | 5.67% | | | 5.54% | | | 5.47% | | | 5.45% | | | 5.34% |
| Securities | | | 2.76% | | | 2.78% | | | 3.33% | | | 3.63% | | | 4.44% |
| Federal funds sold | | | 0.36% | | | 0.21% | | | 0.17% | | | 0.51% | | | 0.55% |
| Yield on earning assets | | | 5.05% | | | 4.89% | | | 5.12% | | | 5.32% | | | 5.27% |
| Interest-bearing deposits | | | 1.56% | | | 1.72% | | | 1.91% | | | 2.03% | | | 2.13% |
| Subordinated debt | | | 5.86% | | | 5.80% | | | 5.91% | | | 6.19% | | | 6.43% |
| Borrowed funds | | | 2.74% | | | 3.19% | | | 3.96% | | | 3.51% | | | 3.21% |
| Cost of paying liabilities | | | 1.87% | | | 2.06% | | | 2.48% | | | 2.53% | | | 2.56% |
| Net interest spread | | | 3.18% | | | 2.83% | | | 2.64% | | | 2.79% | | | 2.71% |
| Net interest rate margin | | | 3.46% | | | 3.15% | | | 2.97% | | | 3.10% | | | 3.02% |
| |
| |
| WEALTH MANAGEMENT | | | | | | | | | | | | | | | |
| Trust Assets under management | | $ | 773,069 | | $ | 750,755 | | $ | 710,224 | | $ | 691,927 | | $ | 681,839 |
| Trust Assets under administration | | | 1,320,714 | | | 1,279,971 | | | 1,190,130 | | | 1,113,466 | | | 1,084,830 |
RECONCILIATION OF U.S. GAAP FINANCIAL MEASURES
PRE-TAX INCOME (LOSS) FROM CONTINUING OPERATIONS TO PRE-TAX, PRE-PROVISION INCOME FROM CONTINUING OPERATIONS
| | For the Quarter Ended |
| | Mar 31, | | Dec 31, | | Sep 30, | | Jun 30, | | Mar 30, |
| (In thousands) | | 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| Pre-tax income (loss) from continuing operations | | $ | (4,776 | ) | | $ | 8 | | | $ | 7,002 | | | $ | (1,634 | ) | | $ | (54,697 | ) |
| Goodwill impairment charge | | | - | | | | - | | | | - | | | | - | | | | 45,377 | |
| Sales and fair value writedowns of other real estate | | | 586 | | | | 1,166 | | | | 602 | | | | 508 | | | | 549 | |
| Sale of securities | | | (557 | ) | | | (3 | ) | | | - | | | | (636 | ) | | | (316 | ) |
| Gain on extinguishment of debt | | | - | | | | (2,062 | ) | | | (5,326 | ) | | | - | | | | | |
| FDIC special assessment (included in Other noninterest expense) | | | - | | | | - | | | | (202 | ) | | | 1,100 | | | | - | |
| (Loss) income before income tax | | | (4,747 | ) | | | (891 | ) | | | 2,076 | | | | (662 | ) | | | (9,087 | ) |
| Provision for loan losses | | | 13,800 | | | | 8,400 | | | | 6,480 | | | | 9,073 | | | | 16,459 | |
| Pre-tax, pre-provision income from continuing operations | | $ | 9,053 | | | $ | 7,509 | | | $ | 8,556 | | | $ | 8,411 | | | $ | 7,372 | |
| | | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
| | For the Quarter Ended |
| | Mar 31, | | Dec 31, | | Sep 30, | | Jun 30, | | Mar 30, |
| (In thousands) | | 2010 | | 2009 | | 2009 | | 2009 | | 2009 |
| Shareholders' equity | | $ | 175,234 | | | $ | 163,912 | | | $ | 166,671 | | | $ | 161,450 | | | $ | 162,798 | |
| Less: Preferred stock | | | (31,976 | ) | | | (31,802 | ) | | | (31,631 | ) | | | (31,463 | ) | | | (31,216 | ) |
| Less: Goodwill | | | (1,974 | ) | | | (1,974 | ) | | | (3,134 | ) | | | (3,134 | ) | | | (3,134 | ) |
| Less: Intangible assets | | | (1,531 | ) | | | (1,643 | ) | | | (2,691 | ) | | | (2,955 | ) | | | (3,227 | ) |
| Tangible common equity | | $ | 139,753 | | | $ | 128,494 | | | $ | 129,215 | | | $ | 123,898 | | | $ | 125,221 | |
| |
| Total assets | | $ | 2,361,405 | | | $ | 2,365,655 | | | $ | 2,518,625 | | | $ | 2,446,265 | | | $ | 2,457,644 | |
| Less: Goodwill | | | (1,974 | ) | | | (1,974 | ) | | | (3,134 | ) | | | (3,134 | ) | | | (3,134 | ) |
| Less: Intangible assets | | | (1,531 | ) | | | (1,643 | ) | | | (2,691 | ) | | | (2,955 | ) | | | (3,227 | ) |
| Tangible assets | | $ | 2,357,900 | | | $ | 2,362,038 | | | $ | 2,512,800 | | | $ | 2,440,176 | | | $ | 2,451,283 | |
| |
| Tangible common equity to tangible assets | | | 5.93% | | | | 5.44% | | | | 5.14% | | | | 5.08% | | | | 5.11% | |
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