EX-99.1 2 ex991financialstatementsan.htm EARNINGS RELEASE Exhibit


EXHIBIT 99.1
enterprisefinancialservices.jpg
ENTERPRISE FINANCIAL REPORTS FIRST QUARTER 2019 RESULTS

First Quarter Highlights
•
Net income of $16.2 million, or $0.67 per diluted share
•
Return on average assets (“ROAA”) of 1.10%
•
Net interest margin (tax equivalent) 3.87%
•
Completed merger of Trinity Capital Corporation (“TCC”)
•
Merger related expenses of $7.3 million pretax reduced earnings per share and ROAA by $0.24 and 0.39%, respectively

St. Louis, Mo. April 22, 2019 – Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company” or “EFSC”) reported net income of $16.2 million for the quarter ended March 31, 2019, a decrease of $7.4 million, and $4.8 million as compared to the linked fourth quarter (“linked quarter”) and prior year quarter, respectively. Earnings per diluted share (“EPS”) was $0.67 for the quarter ended March 31, 2019, a decrease of 34% and 26%, compared to $1.02 and $0.90 for the linked quarter and prior year period, respectively. Net income and EPS in the current quarter declined from both the linked quarter and prior year quarter, primarily as a result of merger-related expenses of $7.3 million pretax ($5.7 million after tax), or $0.24 per diluted share. The issuance of shares related to the merger increased average diluted shares outstanding by 1,064,000 for the quarter ended March 31, 2019. The Company realized growth in its core net interest margin1 of two basis points in the current quarter to 3.79%, as compared to 3.77% in the linked quarter and 3.74% in the prior year quarter.

ROAA, return on average common equity (“ROAE”), and return on average tangible common equity1 (“ROATCE”) were 1.10%, 9.89%, and 12.93%, respectively in the first quarter of 2019. The impact of merger-related expenses reduced ROAA, ROAE, and ROATCE1 by 0.39%, 3.51% and 4.60%, respectively. Excluding merger related expenses, the adjusted ROAA,1 adjusted ROAE,1 and adjusted ROATCE1 were 1.49%, 13.40%, and 17.53%, respectively for the first quarter of 2019.

On March 8, 2019, the Company and its wholly-owned subsidiary bank, Enterprise Bank & Trust, completed the merger of TCC and TCC’s wholly-owned subsidiary, Los Alamos National Bank (“LANB”), respectively, which added $0.7 billion in loans, and $1.1 billion in deposits. The comparison of the financial results for the quarter ended March 31, 2019 to prior periods are affected by the completion of the merger. The total purchase price of the transaction was $209.2 million and consisted of 3,990,822 shares of EFSC common stock valued at $171.9 million and $37.3 million in cash. The merger further enhances the geographic diversity of the Company’s footprint by adding six full service banking offices in Los Alamos, Santa Fe, and Albuquerque, New Mexico. 

The Company’s Board of Directors approved a quarterly dividend of $0.15 per common share, an increase from $0.14 for the prior quarter, payable on June 28, 2019 to shareholders of record as of June 14, 2019.

Jim Lally, EFSC’s President and Chief Executive Officer, commented, “We are pleased with our performance in the first quarter of 2019. Our financial results included continued strong credit performance, an expansion of top-line revenue and the impact of the completion of the TCC acquisition in early March. While expenses from the merger reduced earnings and our operating metrics for the quarter, we were able to start system and operations integration earlier than originally planned.”




Lally added, “We are excited to have completed the acquisition of TCC, the largest acquisition in our Company’s history. We welcome the new employees and the customers of LANB to our combined organization. LANB has a strong history of community engagement that we look forward to continuing. The power of our two franchises will help propel us as the preeminent banking choice in our markets.”

Net Interest Income
Net interest income for the first quarter increased $1.7 million to $52.3 million from $50.6 million in the linked quarter, and increased $6.2 million from the prior year period. Net interest margin on a tax equivalent basis was 3.87% for the first quarter, compared to 3.94% in the linked quarter, and 3.80% in the first quarter of 2018.

Core net interest income1 expanded $2.7 million over the linked quarter primarily due to an increase in average earning assets in the first quarter from the merger of TCC and a higher average loan yield.

Core net interest income1 and core net interest margin1 exclude incremental accretion on non-core acquired loans, which were acquired from the FDIC and previously covered by loss share agreements.

See the table below for a quarterly comparison.
 
For the Quarter ended
($ in thousands)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Net interest income
$
52,343

 
$
50,593

 
$
48,093

 
$
47,048

 
$
46,171

Less: Incremental accretion income
1,157

 
2,109

 
535

 
291

 
766

Core net interest income1
$
51,186

 
$
48,484

 
$
47,558

 
$
46,757

 
$
45,405

 
 
 
 
 
 
 
 
 
 
Net interest margin (tax equivalent)
3.87
%
 
3.94
%
 
3.78
%
 
3.77
%
 
3.80
%
Core net interest margin,1 (tax equivalent)
3.79
%
 
3.77
%
 
3.74
%
 
3.75
%
 
3.74
%



























1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
2


Average Balance Sheet
The following tables present, for the periods indicated, certain information related to our average interest-earning assets and interest-bearing liabilities, as well as, the corresponding interest rates earned and paid, all on a tax equivalent basis. Averages for the quarter ended March 31, 2019 only reflect the TCC acquired balances effective as of March 8, 2019, which increased average earning assets $283 million.
 
For the Quarter ended
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
($ in thousands)
Average
Balance
 
Interest
Income/
Expense
 
Average Yield/ Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Average Yield/ Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Average Yield/ Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, excluding incremental accretion*
$
4,511,387

 
$
59,973

 
5.39
%
 
$
4,272,132

 
$
56,431

 
5.24
%
 
$
4,138,970

 
$
49,806

 
4.88
%
Investments in debt and equity securities*
896,936

 
6,292

 
2.84

 
769,461

 
5,291

 
2.73

 
740,587

 
4,567

 
2.50

Short-term investments
102,166

 
447

 
1.77

 
76,726

 
364

 
1.88

 
69,318

 
240

 
1.40

Total earning assets
5,510,489

 
66,712

 
4.91

 
5,118,319

 
62,086

 
4.81

 
4,948,875

 
54,613

 
4.48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets
445,597

 
 
 
 
 
400,421

 
 
 
 
 
391,237

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
5,956,086

 
 
 
 
 
$
5,518,740

 
 
 
 
 
$
5,340,112

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing transaction accounts
$
1,077,289

 
$
1,790

 
0.67
%
 
$
864,175

 
$
1,221

 
0.56
%
 
$
862,912

 
$
806

 
0.38
%
Money market accounts
1,521,878

 
6,515

 
1.74

 
1,541,832

 
6,140

 
1.58

 
1,391,055

 
3,353

 
0.98

Savings
299,731

 
183

 
0.25

 
206,503

 
168

 
0.32

 
201,852

 
125

 
0.25

Certificates of deposit
712,269

 
3,332

 
1.90

 
696,803

 
3,053

 
1.74

 
603,736

 
1,899

 
1.28

Total interest-bearing deposits
3,611,167

 
11,820

 
1.33

 
3,309,313

 
10,582

 
1.27

 
3,059,555

 
6,183

 
0.82

Subordinated debentures
124,154

 
1,648

 
5.38

 
118,146

 
1,493

 
5.01

 
118,110

 
1,368

 
4.70

FHLB advances
215,420

 
1,398

 
2.63

 
178,185

 
1,121

 
2.50

 
302,548

 
1,258

 
1.69

Other borrowed funds
202,197

 
408

 
0.82

 
152,422

 
213

 
0.55

 
207,442

 
184

 
0.36

Total interest-bearing liabilities
4,152,938

 
15,274

 
1.49

 
3,758,066

 
13,409

 
1.42

 
3,687,655

 
8,993

 
0.99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
1,088,323

 
 
 
 
 
1,125,321

 
 
 
 
 
1,064,771

 
 
 
 
Other liabilities
52,371

 
 
 
 
 
37,489

 
 
 
 
 
33,620

 
 
 
 
Total liabilities
5,293,632

 
 
 
 
 
4,920,876

 
 
 
 
 
4,786,046

 
 
 
 
Shareholders' equity
662,454

 
 
 
 
 
597,864

 
 
 
 
 
554,066

 
 
 
 
Total liabilities and shareholders' equity
$
5,956,086

 
 
 
 
 
$
5,518,740

 
 
 
 
 
$
5,340,112

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core net interest income1
 
 
51,438

 
 
 
 
 
48,677

 
 
 
 
 
45,620

 
 
Core net interest margin1
 
 
 
 
3.79
%
 
 
 
 
 
3.77
%
 
 
 
 
 
3.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incremental accretion on non-core acquired loans
 
 
1,157

 
 
 
 
 
2,109

 
 
 
 
 
766

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net interest income
 
 
$
52,595

 
 
 
 
 
$
50,786

 
 
 
 
 
$
46,386

 
 
Net interest margin
 
 
 
 
3.87
%
 
 
 
 
 
3.94
%
 
 
 
 
 
3.80
%
* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $0.3 million for the three months ended March 31, 2019, $0.2 million for the three months ended December 31, 2018, and $0.2 million for the three months ended March 31, 2018.

1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
3


Core net interest margin1 increased two basis points from the linked-quarter to 3.79% during the current quarter. This increase was primarily due to the impact of interest rate increases on the Company's asset sensitive balance sheet and lower funding costs on TCC acquired deposits. Additionally, the yield on loans, excluding incremental accretion on non-core acquired loans, increased 15 basis points to 5.39% from 5.24% due to the effect of increasing interest rates on the existing variable-rate loan portfolio and higher rates on newly originated loans. The cost of interest-bearing deposits increased six basis points from the linked quarter to 1.33% for the quarter ended March 31, 2019. The increase in the interest rate paid on deposits reflects market interest rate trends, as the Company continues to defend existing and attract new core deposit relationships partially offset by lower costs on TCC acquired deposits. The cost of total interest-bearing liabilities increased seven basis points to 1.49% for the quarter ended March 31, 2019 from 1.42% for the linked quarter.

The Company continues to manage its balance sheet to grow net interest income and expects to maintain core net interest margin1 over the coming quarters; however, pressure on funding costs could negate the expected trends in core net interest margin1.

Loans
The following table presents total loans with selected specialized lending detail for the most recent five quarters:
 
At the Quarter ended
 
March 31, 2019
 
 
($ in thousands)
TCC
 
Legacy Enterprise
 
Consolidated
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
C&I - general
$
65,122

 
$
1,063,633

 
$
1,128,755

 
$
995,491

 
$
969,898

 
$
992,311

 
$
948,021

CRE investor owned - general
304,615

 
878,856

 
1,183,471

 
862,423

 
846,322

 
841,587

 
841,633

CRE owner occupied - general
91,758

 
484,268

 
576,026

 
496,835

 
482,146

 
498,834

 
480,314

Enterprise value lendinga
—

 
439,500

 
439,500

 
465,992

 
442,439

 
442,877

 
439,352

Life insurance premium financinga
—

 
440,693

 
440,693

 
417,950

 
378,826

 
358,787

 
365,377

Residential real estate - general
137,487

 
295,069

 
432,556

 
304,671

 
314,315

 
326,790

 
337,829

Construction and land development - general
70,251

 
274,956

 
345,207

 
310,832

 
312,617

 
289,206

 
297,088

Tax creditsa
—

 
235,454

 
235,454

 
262,735

 
256,666

 
260,595

 
244,088

Agriculture
—

 
126,088

 
126,088

 
136,188

 
138,005

 
128,118

 
119,199

Consumer and other - general
12,835

 
96,492

 
109,327

 
96,884

 
126,196

 
136,656

 
117,944

Total Loans
$
682,068

 
$
4,335,009

 
$
5,017,077

 
$
4,350,001

 
$
4,267,430

 
$
4,275,761

 
$
4,190,845

 
 
 

 
 
 
 
 
 
 
 
 
 
Total loan yield
 
 

 
5.50
%
 
5.44
%
 
5.18
%
 
5.04
%
 
4.96
%
Total C&I loans to total loans
 
 
 
 
44
%
 
49
%
 
48
%
 
48
%
 
47
%
Variable interest rate loans to total loans
 
 
 
 
60
%
 
62
%
 
62
%
 
60
%
 
59
%
 
Certain prior period amounts have been reclassified among the categories to conform to the current period presentation

aSpecialized categories may include a mix of C&I, CRE, Construction and land development, or Consumer and other loans.

Loans totaled $5.0 billion at March 31, 2019, increasing $667 million compared to the linked quarter. On a year-over-year basis, loans increased $826 million, or 20%. The increase is primarily attributable to the acquisition of TCC along with growth in the commercial and industrial (“C&I”), commercial real estate (“CRE”), and life insurance premium finance categories, partially offset by paydowns outpacing growth in the other categories. Total legacy loans decreased $15 million at March 31, 2019 from the linked quarter and increased $144 million from the prior year quarter. We expect continued loan growth in 2019 to be a high single digit percentage, excluding acquired loans.


1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
4


The Company continues to focus on originating high-quality C&I relationships, as they typically have variable interest rates and allow for cross selling opportunities involving other banking products. C&I loan growth, coupled with typically fixed rate CRE lending, supports management’s efforts to maintain a flexible asset sensitive interest rate risk position.

Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:
 
For the Quarter ended
($ in thousands)
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Nonperforming loans
$
9,607

 
$
16,745

 
$
17,044

 
$
14,801

 
$
15,582

Other real estate
6,804

 
469

 
408

 
454

 
455

Nonperforming assets
$
16,411

 
$
17,214

 
$
17,452

 
$
15,255

 
$
16,037

 
 
 
 
 
 
 
 
 
 
Nonperforming loans to total loans
0.19
%
 
0.38
%
 
0.40
%
 
0.35
%
 
0.37
%
Nonperforming assets to total assets
0.24

 
0.30

 
0.32

 
0.28

 
0.30

Allowance for loan losses to total loans
0.86

 
1.00

 
1.04

 
1.04

 
1.07

Net charge-offs (recoveries)
$
1,825

 
$
2,822

 
$
2,447

 
$
641

 
$
(226
)

Nonperforming loans decreased $7.1 million, or 43%, to $9.6 million at March 31, 2019 from $16.7 million at December 31, 2018 primarily due to principal reductions of $5.0 million and charge-offs of $2.1 million, which were previously reserved.

Other real estate increased during the quarter ended March 31, 2019 primarily due to the addition of 15 properties with the acquisition of TCC totaling $5.0 million.

The Company recorded a net provision for loan losses of $1.5 million compared to $2.1 million for the linked quarter and $1.9 million for the prior year quarter, respectively. The provision is reflective of charge-offs in the period and maintaining a prudent credit risk posture. The decrease in the ratio of allowance for loan losses to total loans, from 1.00% in the linked quarter to 0.86% in the current quarter, is primarily due to the acquisition of TCC loans that were recorded at fair value and do not have a corresponding allowance for loan losses. The Company has recorded a preliminary credit mark on the TCC loan portfolio of $24.3 million at March 31, 2019.


1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
5


Deposits
The following table presents deposits broken out by type for the most recent five quarters:
 
At the Quarter ended
 
March 31, 2019
 
 
 
 
 
 
 
 
($ in thousands)
TCC
 
Legacy Enterprise
 
Consolidated
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 30, 2018
Noninterest-bearing accounts
$
169,344

 
$
1,017,164

 
$
1,186,508

 
$
1,100,718

 
$
1,062,126

 
$
1,050,969

 
$
1,101,705

Interest-bearing transaction accounts
401,257

 
988,569

 
1,389,826

 
1,037,684

 
743,351

 
754,819

 
875,880

Money market and savings accounts
390,192

 
1,765,839

 
2,156,031

 
1,765,154

 
1,730,762

 
1,768,793

 
1,655,489

Brokered certificates of deposit
—

 
180,788

 
180,788

 
198,981

 
202,323

 
224,192

 
201,082

Other certificates of deposit
133,556

 
490,404

 
623,960

 
485,448

 
471,914

 
449,139

 
447,222

Total deposit portfolio
$
1,094,349

 
$
4,442,764

 
$
5,537,113

 
$
4,587,985

 
$
4,210,476

 
$
4,247,912

 
$
4,281,378

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits to total deposits
15
%
 
23
%
 
21
%
 
24
%
 
25
%
 
25
%
 
26
%

Total deposits at March 31, 2019 were $5.5 billion, an increase of $949 million from December 31, 2018, and an increase of $1.3 billion from March 31, 2018. Total legacy deposits decreased $145 million at March 31, 2019 from the linked quarter and increased $384 million from the prior year quarter.

Core deposits, defined as total deposits excluding certificates of deposits, were $4.7 billion at March 31, 2019, an increase of $829 million from the linked quarter, and an increase of $1.1 billion from the prior year period. The increase is primarily attributable to the acquisition of TCC, partially offset by normal seasonal reductions with some of our corporate clients.

Noninterest-bearing deposits were $1.2 billion at March 31, 2019, an increase of $86 million compared to December 31, 2018, and an increase of $85 million compared to March 31, 2018. The total cost of deposits increased seven basis points to 1.02% for the current quarter compared to 0.95% and 0.61% in the linked and prior year quarters, respectively. The cost of deposits reflects interest rate conditions for existing clients as well as rates for new customer origination. The Company benefited from the addition of TCC’s low-cost deposit portfolio, which reduced the total cost of deposits in the first quarter by six basis points.

Noninterest Income
Total noninterest income for the quarter ended March 31, 2019 was $9.2 million, a decrease of $1.5 million, or 14% from the linked quarter, and relatively stable with the prior year quarter. The decrease from the linked quarter was driven by a reduction in state tax credit activity, offset by contributions from TCC of approximately $0.6 million, primarily related to wealth management and card services revenue. The acquisition of TCC added $406 million of assets under management.
The Company expects growth in noninterest income of a high single digit percentage for 2019 over 2018 levels, exclusive of the impact of the TCC acquisition.

1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
6


Noninterest Expenses
Noninterest expenses were $39.8 million for the quarter ended March 31, 2019, compared to $30.7 million for the quarter ended December 31, 2018, and $29.1 million for the quarter ended March 31, 2018. The increase from the linked quarter and prior year period was primarily due to merger related expenses of $7.3 million and an increase in employee compensation and benefits, which includes seasonally higher payroll taxes of $1.1 million and TCC post-close compensation expenses of $1.2 million. The Company expects to incur additional operational and merger related expenses as systems are integrated and operations are combined.
 
The Company’s core efficiency ratio1 was 54.1% for the quarter ended March 31, 2019, compared to 49.8% for the linked quarter and 54.0% for the prior year period and reflects a seasonal decline in noninterest income as well as an increase in operating expenses associated with the acquisition of TCC.

The Company expects to continue to invest in revenue producing associates and other infrastructure that supports additional growth. These investments are expected to result in expense growth, at a rate of 35% - 45% of projected revenue growth for 2019, resulting in continued improvements to the Company’s efficiency ratio. Additionally, conversion of LANB systems is expected to occur in the second quarter resulting in efficiency improvements in the second half of 2019.

Income Taxes
The Company’s effective tax rate was 20% for the quarter ended March 31, 2019 compared to 17% for the linked quarter, and 15% for the prior year quarter. Nondeductible merger related expenses in the current quarter increased income tax expense $0.3 million.

The Company expects its effective tax rate for the remainder of 2019 to be approximately 18% - 20%.

Capital
The following table presents various capital ratios:
 
At the Quarter ended
Percent
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Total risk-based capital to risk-weighted assets
12.86
%
 
13.02
%
 
12.94
%
 
12.60
%
 
12.41
%
Tier 1 capital to risk weighted assets
11.25

 
11.14

 
11.03

 
10.68

 
10.46

Common equity tier 1 capital to risk-weighted assets
9.64

 
9.79

 
9.66

 
9.32

 
9.07

Tangible common equity to tangible assets1
8.35

 
8.66

 
8.54

 
8.30

 
8.13


Capital ratios for the current quarter are based on the Basel III regulatory capital framework as applied to the Company’s current businesses and operations, and are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review and implementation guidance. The attached tables contain a reconciliation of the tangible common equity ratio to U.S. GAAP financial measures.

Use of Non-GAAP Financial Measures1 
The Company’s accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as net interest margin, efficiency ratios, return on average assets, return on average equity, and the tangible common equity ratio, in this release that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its core net interest margin, core efficiency ratio, return on average assets, return on average equity, and return on average tangible common equity, collectively “core performance measures,” presented in this

1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
7


earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of non-core acquired loans, which were acquired from the FDIC and previously covered by loss share agreements, and the related income and expenses, the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures include contractual interest on non-core acquired loans, but exclude incremental accretion on these loans. Core performance measures also exclude expenses directly related to non-core acquired loans. Core performance measures also exclude certain other income and expense items, such as merger related expenses, facilities charges, and the gain or loss on sale of investment securities, the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis. The attached tables contain a reconciliation of these core performance measures to the GAAP measures. The Company believes that the tangible common equity ratio provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.

The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength. The Company’s management uses, and believes that investors benefit from referring to, these non-GAAP measures and ratios in assessing the Company’s operating results and related trends and when forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP. In the attached tables, the Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measures for the periods indicated.

Conference Call and Webcast Information
The Company will host a conference call and webcast at 2:30 p.m. Central time on Tuesday, April 23, 2019. During the call, management will review the first quarter of 2019 results and related matters. This press release as well as a related slide presentation will be accessible on the Company’s website at www.enterprisebank.com under “Investor Relations” beginning prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-800-667-5617 (Conference ID #8155182). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC1Q2019earnings and register to receive a dial in number, passcode, and pin number. The replay will be available for approximately two weeks following the conference call.

About Enterprise
Enterprise Financial Services Corp (NASDAQ: EFSC), with approximately $7 billion in assets, is a bank holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly owned subsidiary of Enterprise, operates 34 branch offices in Arizona, Kansas, Missouri and New Mexico. Enterprise Bank & Trust offers a range of business and personal banking services and wealth management services. Enterprise Trust, a division of Enterprise Bank & Trust, provides financial planning, estate planning, investment management and trust services to businesses, individuals, institutions, retirement plans and non-profit organizations. Additional information is available at www.enterprisebank.com.

Enterprise Financial Services Corp’s common stock is traded on the Nasdaq Stock Market under the symbol “EFSC.” Please visit our website at www.enterprisebank.com to see our regularly posted material information.


1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
8


Forward-looking Statements
Readers should note that, in addition to the historical information contained herein, this press release contains “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, shareholder value creation and the impact of the acquisition of Trinity Capital Corporation and its wholly-owned subsidiary, Los Alamos National Bank, and other acquisitions.

Forward-looking statements include, but are not limited to, statements about the Company’s plans, expectations, and projections of future financial and operating results, as well as statements regarding the Company’s plans, objectives, expectations or consequences of announced transactions. The Company uses words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “could,” “continue,” and “intend”, and variations of such words and similar expressions, in this release to identify such forward-looking statements. Forward-looking statements 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, the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses and grow the acquired operations, as well as credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic conditions, risks associated with rapid increases or decreases in prevailing interest rates, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in regulatory requirements, changes in accounting regulation or standards applicable to banks, as well as other risk factors described in the Company’s 2018 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission (the “SEC”). 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.

For more information contact
Investor Relations: Keene Turner, Executive Vice President and CFO (314) 512-7233
Media: Karen Loiterstein, Senior Vice President (314) 512-7141


1 A non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.
9


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
 
For the Quarter ended
($ in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
EARNINGS SUMMARY
 
 
 
 
 
 
 
 
 
Net interest income
$
52,343

 
$
50,593

 
$
48,093

 
$
47,048

 
$
46,171

Provision for loan losses
1,476

 
2,120

 
2,263

 
390

 
1,871

Noninterest income
9,230

 
10,702

 
8,410

 
9,693

 
9,542

Noninterest expense
39,838

 
30,747

 
29,922

 
29,219

 
29,143

Income before income tax expense
20,259


28,428


24,318


27,132


24,699

Income tax expense
4,103

 
4,899

 
1,802

 
4,881

 
3,778

Net income
$
16,156

 
$
23,529


$
22,516


$
22,251


$
20,921

 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
$
0.67

 
$
1.02

 
$
0.97

 
$
0.95

 
$
0.90

Return on average assets
1.10
%
 
1.69
%
 
1.63
%
 
1.65
%
 
1.59
%
Return on average common equity
9.89

 
15.61

 
15.22

 
15.70

 
15.31

Return on average tangible common equity
12.93

 
19.79

 
19.42

 
20.23

 
19.92

Net interest margin (tax equivalent)
3.87

 
3.94

 
3.78

 
3.77

 
3.80

Core net interest margin (tax equivalent)1
3.79

 
3.77

 
3.74

 
3.75

 
3.74

Efficiency ratio
64.70

 
50.16

 
52.96

 
51.50

 
52.31

Core efficiency ratio1
54.06

 
49.77

 
52.23

 
52.36

 
54.02

 
 
 
 
 
 
 
 
 
 
Total assets
$
6,932,757

 
$
5,645,662

 
$
5,517,539

 
$
5,509,924

 
$
5,383,102

Total average assets
5,956,086

 
5,518,740

 
5,471,504

 
5,415,151

 
5,340,112

Total deposits
5,537,113

 
4,587,985

 
4,210,476

 
4,247,912

 
4,281,377

Total average deposits
4,699,490

 
4,434,634

 
4,255,523

 
4,230,291

 
4,124,326

Period end common shares outstanding
26,878

 
22,812

 
23,092

 
23,141

 
23,111

Dividends per common share
$
0.14

 
$
0.13

 
$
0.12

 
$
0.11

 
$
0.11

Tangible book value per common share1
$
20.80

 
$
20.95

 
$
19.94

 
$
19.32

 
$
18.49

Tangible common equity to tangible assets1
8.35
%
 
8.66
%
 
8.54
%
 
8.30
%
 
8.13
%
Total risk-based capital to risk-weighted assets
12.86

 
13.02

 
12.94

 
12.60

 
12.41

 
 
 
 
 
 
 
 
 
 
1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.




10


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
For the Quarter ended
($ in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
INCOME STATEMENTS
 
 
 
 
 
 
 
 
 
NET INTEREST INCOME
 
 
 
 
 
 
 
 
 
Total interest income
$
67,617

 
$
64,002

 
$
60,757

 
$
57,879

 
$
55,164

Total interest expense
15,274

 
13,409

 
12,664

 
10,831

 
8,993

Net interest income
52,343

 
50,593


48,093


47,048


46,171

Provision for loan losses
1,476

 
2,120

 
2,263

 
390

 
1,871

Net interest income after provision for loan losses
50,867

 
48,473


45,830


46,658


44,300

 
 
 
 
 
 
 
 
 
 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
Deposit service charges
2,935

 
2,894

 
2,997

 
3,007

 
2,851

Wealth management revenue
1,992

 
1,974

 
2,012

 
2,141

 
2,114

Card services revenue
1,790

 
1,760

 
1,760

 
1,650

 
1,516

Tax credit activity, net
158

 
2,312

 
192

 
64

 
252

Gain on sale of other real estate
66

 
—

 
13

 
—

 
—

Gain on sale of investment securities
—

 
—

 
—

 
—

 
9

Other income
2,289

 
1,762

 
1,436

 
2,831

 
2,800

Total noninterest income
9,230

 
10,702


8,410


9,693


9,542

 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
Employee compensation and benefits
19,352

 
16,669

 
16,297

 
16,582

 
16,491

Occupancy
2,637

 
2,408

 
2,394

 
2,342

 
2,406

Merger related expenses
7,270

 
1,271

 
—

 
—

 
—

Other
10,579

 
10,399

 
11,231

 
10,295

 
10,246

Total noninterest expense
39,838

 
30,747


29,922


29,219


29,143

 
 
 
 
 
 
 
 
 
 
Income before income tax expense
20,259

 
28,428


24,318


27,132


24,699

Income tax expense
4,103

 
4,899

 
1,802

 
4,881

 
3,778

Net income
$
16,156

 
$
23,529


$
22,516


$
22,251


$
20,921

 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.68

 
$
1.02

 
$
0.97

 
$
0.96

 
$
0.91

Diluted earnings per share
0.67

 
1.02

 
0.97

 
0.95

 
0.90




11


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
    
 
At the Quarter ended
($ in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
BALANCE SHEETS
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
85,578

 
$
91,511

 
$
78,119

 
$
91,851

 
$
81,604

Interest-earning deposits
139,389

 
108,226

 
81,351

 
87,586

 
63,897

Debt and equity investments
1,198,413

 
813,702

 
775,344

 
756,203

 
752,114

Loans held for sale
654

 
392

 
738

 
1,388

 
1,748

 
 
 
 
 
 
 
 
 
 
Loans
5,017,077

 
4,350,001

 
4,267,430

 
4,275,761

 
4,190,845

   Less: Allowance for loan losses
43,095

 
43,476

 
44,186

 
44,370

 
44,650

Total loans, net
4,973,982

 
4,306,525

 
4,223,244

 
4,231,391

 
4,146,195

 
 
 
 
 
 
 
 
 
 
Other real estate
6,804

 
469

 
408

 
454

 
455

Fixed assets, net
60,301

 
32,109

 
32,354

 
32,814

 
32,127

Tax credits, held for sale
37,215

 
37,587

 
45,625

 
46,481

 
42,364

Goodwill
207,632

 
117,345

 
117,345

 
117,345

 
117,345

Intangible assets, net
31,048

 
8,553

 
9,148

 
9,768

 
10,399

Other assets
191,741

 
129,243

 
153,863

 
134,643

 
134,854

Total assets
$
6,932,757

 
$
5,645,662

 
$
5,517,539

 
$
5,509,924

 
$
5,383,102

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
1,186,508

 
$
1,100,718

 
$
1,062,126

 
$
1,050,969

 
$
1,101,705

Interest-bearing deposits
4,350,605

 
3,487,267

 
3,148,350

 
3,196,943

 
3,179,672

Total deposits
5,537,113

 
4,587,985

 
4,210,476

 
4,247,912

 
4,281,377

Subordinated debentures
140,668

 
118,156

 
118,144

 
118,131

 
118,118

Federal Home Loan Bank advances
180,466

 
70,000

 
401,000

 
361,534

 
224,624

Other borrowings
212,171

 
223,450

 
161,795

 
167,216

 
166,589

Other liabilities
64,504

 
42,267

 
39,287

 
41,047

 
37,379

Total liabilities
6,134,922

 
5,041,858

 
4,930,702

 
4,935,840

 
4,828,087

Shareholders’ equity
797,835

 
603,804

 
586,837

 
574,084

 
555,015

Total liabilities and shareholders’ equity
$
6,932,757

 
$
5,645,662

 
$
5,517,539

 
$
5,509,924

 
$
5,383,102





12


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
For the Quarter ended
($ in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
LOAN PORTFOLIO
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
2,227,050

 
$
2,123,167

 
$
2,035,852

 
$
2,040,751

 
$
1,984,650

Commercial real estate
1,870,040

 
1,481,834

 
1,450,184

 
1,456,373

 
1,428,040

Construction real estate
369,365

 
334,645

 
332,026

 
305,238

 
312,377

Residential real estate
432,902

 
305,026

 
314,676

 
327,157

 
338,200

Consumer and other
117,720

 
105,329

 
134,692

 
146,242

 
127,578

Total loans
$
5,017,077

 
$
4,350,001


$
4,267,430


$
4,275,761


$
4,190,845

 
 
 
 
 
 
 
 
 
 
DEPOSIT PORTFOLIO
 
 
 
 
 
 
 
 
 
Noninterest-bearing accounts
$
1,186,508

 
$
1,100,718

 
$
1,062,126

 
$
1,050,969

 
$
1,101,705

Interest-bearing transaction accounts
1,389,826

 
1,037,684

 
743,351

 
754,819

 
875,880

Money market and savings accounts
2,156,031

 
1,765,154

 
1,730,762

 
1,768,793

 
1,655,488

Brokered certificates of deposit
180,788

 
198,981

 
202,323

 
224,192

 
201,082

Other certificates of deposit
623,960

 
485,448

 
471,914

 
449,139

 
447,222

Total deposit portfolio
$
5,537,113

 
$
4,587,985


$
4,210,476


$
4,247,912


$
4,281,377

 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES
 
 
 
 
 
 
 
 
 
Total loans
$
4,511,387

 
$
4,272,132

 
$
4,252,524

 
$
4,224,016

 
$
4,138,970

Debt and equity investments
896,936

 
769,461

 
755,129

 
743,534

 
740,587

Interest-earning assets
5,510,489

 
5,118,319

 
5,072,573

 
5,023,607

 
4,948,875

Total assets
5,956,086

 
5,518,740

 
5,471,504

 
5,415,151

 
5,340,112

Deposits
4,699,490

 
4,434,634

 
4,255,523

 
4,230,291

 
4,124,326

Shareholders’ equity
662,454

 
597,864

 
586,765

 
568,555

 
554,066

Tangible common equity1
506,560

 
471,678

 
459,975

 
441,136

 
426,006

 
 
 
 
 
 
 
 
 
 
YIELDS (tax equivalent)
 
 
 
 
 
 
 
 
 
Total loans
5.50
%
 
5.44
%
 
5.18
%
 
5.04
%
 
4.96
%
Debt and equity investments
2.84

 
2.73

 
2.71

 
2.58

 
2.50

Interest-earning assets
4.99

 
4.98

 
4.77

 
4.64

 
4.54

Interest-bearing deposits
1.33

 
1.27

 
1.16

 
0.98

 
0.82

Total deposits
1.02

 
0.95

 
0.86

 
0.73

 
0.61

Subordinated debentures
5.38

 
5.01

 
4.98

 
4.94

 
4.70

Borrowed funds
1.75

 
1.60

 
1.62

 
1.41

 
1.15

Cost of paying liabilities
1.49

 
1.42

 
1.34

 
1.16

 
0.99

Net interest margin
3.87

 
3.94

 
3.78

 
3.77

 
3.80



13


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
 
For the Quarter ended
(in thousands, except % and per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
ASSET QUALITY
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries)
$
1,825

 
$
2,822

 
$
2,447

 
$
641

 
$
(226
)
Nonperforming loans
9,607

 
16,745

 
17,044

 
14,801

 
15,582

Classified assets
79,750

 
70,126

 
73,704

 
74,001

 
77,195

Nonperforming loans to total loans
0.19
%
 
0.38
%
 
0.40
%
 
0.35
%
 
0.37
 %
Nonperforming assets to total assets
0.24

 
0.30

 
0.32

 
0.28

 
0.30

Allowance for loan losses to total loans
0.86

 
1.00

 
1.04

 
1.04

 
1.07

Allowance for loan losses to nonperforming loans
448.6

 
259.6

 
259.3

 
299.8

 
281.7

Net charge-offs (recoveries) to average loans (annualized)
0.16

 
0.26

 
0.23

 
0.06

 
(0.02
)
 
 
 
 
 
 
 
 
 
 
WEALTH MANAGEMENT
 
 
 
 
 
 
 
 
 
Trust assets under management
$
1,587,627

 
$
1,119,329

 
$
1,174,798

 
$
1,337,030

 
$
1,319,259

Trust assets under administration
2,405,673

 
1,811,512

 
1,984,859

 
2,165,870

 
2,151,697

 
 
 
 
 
 
 
 
 
 
MARKET DATA
 
 
 
 
 
 
 
 
 
Book value per common share
$
29.68

 
$
26.47

 
$
25.41

 
$
24.81

 
$
24.02

Tangible book value per common share1
20.80

 
20.95

 
19.94

 
19.32

 
18.49

Market value per share
40.77

 
37.63

 
53.05

 
53.95

 
46.90

Period end common shares outstanding
26,878

 
22,812

 
23,092

 
23,141

 
23,111

Average basic common shares
23,927

 
23,014

 
23,148

 
23,124

 
23,115

Average diluted common shares
24,083

 
23,170

 
23,329

 
23,318

 
23,287

 
 
 
 
 
 
 
 
 
 
CAPITAL
 
 
 
 
 
 
 
 
 
Total risk-based capital to risk-weighted assets
12.86
%
 
13.02
%
 
12.94
%
 
12.60
%
 
12.41
 %
Tier 1 capital to risk-weighted assets
11.25

 
11.14

 
11.03

 
10.68

 
10.46

Common equity tier 1 capital to risk-weighted assets
9.64

 
9.79

 
9.66

 
9.32

 
9.07

Tangible common equity to tangible assets1
8.35

 
8.66

 
8.54

 
8.30

 
8.13

 
 
 
 
 
 
 
 
 
 
1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.


14


ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
 
For the Quarter ended
($ in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
CORE PERFORMANCE MEASURES
Net interest income
$
52,343

 
$
50,593

 
$
48,093

 
$
47,048

 
$
46,171

Less: Incremental accretion income
1,157

 
2,109

 
535

 
291

 
766

Core net interest income
51,186

 
48,484

 
47,558

 
46,757

 
45,405

 
 
 
 
 
 
 
 
 
 
Total noninterest income
9,230

 
10,702

 
8,410

 
9,693

 
9,542

Less: Other income from non-core acquired assets
365

 
10

 
7

 
18

 
1,013

Less: Gain on sale of investment securities
—

 
—

 
—

 
—

 
9

Less: Other non-core income
—

 
26

 
—

 
649

 
—

Core noninterest income
8,865

 
10,666

 
8,403

 
9,026

 
8,520

 
 
 
 
 
 
 
 
 
 
Total core revenue
60,051

 
59,150

 
55,961

 
55,783

 
53,925

 
 
 
 
 
 
 
 
 
 
Total noninterest expense
39,838

 
30,747

 
29,922

 
29,219

 
29,143

Less: Other expenses related to non-core acquired loans
103

 
40

 
12

 
(229
)
 
14

Less: Facilities disposal
—

 
—

 
—

 
239

 
—

Less: Merger related expenses
7,270

 
1,271

 
—

 
—

 
—

Less: Non-recurring excise tax
—

 
—

 
682

 
—

 
—

Core noninterest expense
32,465

 
29,436


29,228


29,209


29,129

 
 
 
 
 
 
 
 
 
 
Core efficiency ratio
54.06
%
 
49.77
%
 
52.23
%
 
52.36
%
 
54.02
%
 
 
 
 
 
 
 
 
 
 
NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (TAX EQUIVALENT)
Net interest income
$
52,595

 
$
50,786

 
$
48,299

 
$
47,254

 
$
46,386

Less: Incremental accretion income
1,157

 
2,109

 
535

 
291

 
766

Core net interest income
$
51,438

 
$
48,677

 
$
47,764

 
$
46,963

 
$
45,620

 
 
 
 
 
 
 
 
 
 
Average earning assets
$
5,510,489

 
$
5,118,319

 
$
5,072,573

 
$
5,023,607

 
$
4,948,875

Reported net interest margin
3.87
%
 
3.94
%
 
3.78
%
 
3.77
%
 
3.80
%
Core net interest margin
3.79

 
3.77

 
3.74

 
3.75

 
3.74

SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity
$
797,835

 
$
603,804

 
$
586,837

 
$
574,084

 
$
555,015

Less: Goodwill
207,632

 
117,345

 
117,345

 
117,345

 
117,345

Less: Intangible assets
31,048

 
8,553

 
9,148

 
9,768

 
10,399

Tangible common equity
$
559,155

 
$
477,906

 
$
460,344

 
$
446,971

 
$
427,271

 
 
 
 
 
 
 
 
 
 
Total assets
$
6,932,757

 
$
5,645,662

 
$
5,517,539

 
$
5,509,924

 
$
5,383,102

Less: Goodwill
207,632

 
117,345

 
117,345

 
117,345

 
117,345

Less: Intangible assets
31,048

 
8,553

 
9,148

 
9,768

 
10,399

Tangible assets
$
6,694,077

 
$
5,519,764

 
$
5,391,046

 
$
5,382,811

 
$
5,255,358

 
 
 
 
 
 
 
 
 
 
Tangible common equity to tangible assets
8.35
%
 
8.66
%

8.54
%

8.30
%

8.13
%



15


 
For the Quarter ended

($ in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity
$
662,454

 
$
597,864

 
$
554,066

Less average goodwill
141,422

 
117,345

 
117,345

Less average intangible assets
14,472

 
8,841

 
10,715

Average tangible common equity
506,560

 
471,678

 
426,006

 
 
 
 
 
 

 
For the Quarter ended

($ in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
IMPACT OF MERGER-RELATED EXPENSES
 
 
 
 
 
Net income - GAAP
$
16,156

 
$
23,529

 
$
20,921

Merger related expenses
7,270

 
1,271

 
—

Related tax effect
(1,535
)
 
(314
)
 
—

Adjusted net income - Non-GAAP
$
21,891

 
$
24.486

 
$
20.921

 
 
 
 
 
 
Average assets
$
5,956,086

 
$
5,518,740

 
$
5,340,112

ROAA - GAAP net income
1.10
%
 
1.69
%
 
1.59
%
ROAA - Adjusted net income
1.49

 
1.76

 
1.59

 
 
 
 
 
 
Average shareholder’s equity
$
662,454

 
$
597,864

 
$
554,066

ROAE - GAAP net income
9.89
%
 
15.61
%
 
15.31
%
ROAE - Adjusted net income
13.40

 
16.25

 
15.31

 
 
 
 
 
 
Average tangible common equity
$
506,560

 
$
471,678

 
$
426,006

ROATCE - GAAP net income
12.93
%
 
19.79
%
 
19.92
%
ROATCE - Adjusted net income
17.53

 
20.60

 
19.92




16