EX-99.1 2 ex991financialstatemen.htm EARNINGS RELEASE Document


EXHIBIT 99.1
Filed by Enterprise Financial Services Corp
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Seacoast Commerce Banc Holdings
SEC Registration Statement No.: 333-248758
enterprisefinancialser.jpg
ENTERPRISE FINANCIAL REPORTS THIRD QUARTER 2020 RESULTS

Third Quarter Results
•Net income of $18.0 million, $0.68 per diluted share, including the impact of provision for credit losses of $0.40 per share
•Net interest margin (tax equivalent) of 3.29%
•Return on average assets of 0.86%
•Maintained dividend of $0.18 per share for fourth quarter
•Received Federal Reserve and FDIC approval for announced acquisition of Seacoast Commerce Banc Holdings (“Seacoast”) and Seacoast Commerce Bank

St. Louis, Mo. October 19, 2020 – Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”) reported net income of $18.0 million for the third quarter 2020, an increase of $3.3 million compared to the linked second quarter (“linked quarter”) and a decrease of $11.1 million from the prior year quarter. Earnings per diluted share (“EPS”) was $0.68 for the third quarter 2020, compared to $0.56 and $1.08 for the linked and prior year quarters, respectively. Net income and EPS in the current quarter increased from the linked quarter primarily due to a reduction in provision for credit losses and an increase in noninterest income. This increase was partially offset by $1.6 million of merger-related expenses. The decrease in net income and EPS from the prior year quarter was primarily due to an increase in provision for credit losses.

Jim Lally, EFSC’s President and Chief Executive Officer, commented, “Today we reported earnings of $0.68 per diluted share for the third quarter. These financial results reflect solid performance with pre-provision net revenue1 of $38.0 million, or 1.81% of average assets. Given the ongoing economic uncertainty, we continued to build our allowance for credit losses, and our earnings profile allowed us to also build capital during the third quarter. As we move into the end of 2020, we remain well positioned to continue to support our customers, complete the acquisition of Seacoast and execute on our business plans.”

Highlights

•Earnings - Net income in the third quarter 2020 was $18.0 million, an increase of $3.3 million compared to the linked quarter and a decrease of $11.1 million from the prior year quarter. EPS was $0.68 per diluted share for the third quarter 2020, compared to $0.56 and $1.08 per diluted share for the linked and prior year quarters, respectively.

•Pre-provision net revenue1 (“PPNR”) - PPNR (excluding merger-related expenses) of $38.0 million in the third quarter 2020 increased $0.1 million and decreased $0.7 million from the linked and prior year quarters, respectively.

1 PPNR is a non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.



•Net interest income and net interest margin (“NIM”) - Net interest income of $63.4 million for the third quarter 2020 decreased $2.5 million and increased $0.3 million, from the linked quarter and prior year quarter, respectively. NIM was 3.29% for the third quarter 2020, compared to 3.53% and 3.81% for the linked quarter and prior year quarter, respectively.

•Noninterest income - Noninterest income of $12.6 million for the third quarter 2020 increased $2.7 million and decreased $0.9 million from the linked quarter and prior year quarter, respectively. The current quarter increase was driven by volume increases in deposit services, card services, mortgage banking and tax credit activity.

•Loans - Total loans declined $13.7 million, or 0.9% on an annualized basis, from the linked quarter to $6.1 billion as of September 30, 2020. Year-over-year, loans grew $898.3 million, or 17.2% on an annualized basis, from $5.2 billion as of September 30, 2019. Average loans totaled $6.1 billion for the quarter ended September 30, 2020 compared to $6.0 billion and $5.2 billion for the linked and prior year quarters, respectively. Paycheck Protection Program (“PPP”) loans primarily contributed to growth in the loan portfolio over the prior year quarter. As of September 30, 2020, loan modifications in a deferral status comprised 2% of the loan portfolio.

    PPP details:
Quarter ended
($ in thousands, except per share data)September 30, 2020June 30, 2020
PPP loans outstanding, net of unearned fees$819,100 $807,814 
Average PPP loans outstanding, net813,244 634,632 
PPP average loan size216 224 
PPP interest and fee income5,226 4,083 
PPP unearned fees19,522 22,414 
PPP average yield2.56 %2.59 %

Quarter ended
September 30, 2020June 30, 2020
Financial Metrics:As ReportedExcluding PPP*As ReportedExcluding PPP*
EPS$0.68 $0.53 $0.56 $0.44 
ROAA 0.86 %0.74 %0.72 %0.62 %
PPNR ROAA (excluding merger-related exp)1.81 %1.73 %1.87 %1.81 %
Tangible common equity/tangible assets*7.99 %8.89 %7.81 %8.67 %
Leverage ratio9.2 %10.2 %9.2 %10.0 %
NIM (tax equivalent) 3.29 %3.37 %3.53 %3.62 %
Allowance for credit losses on loans/loans 2.01 %2.32 %1.80 %2.07 %
* Non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables. Calculations not adjusted for increase in average deposits or increase in deposit expense, as applicable.

•Asset quality - The allowance for credit losses on loans to total loans increased to 2.01% at September 30, 2020 from 1.80% and 0.85% at June 30, 2020 and September 30, 2019, respectively. Nonperforming assets to total assets was 0.53% at September 30, 2020 compared to 0.55% and 0.33% at June 30, 2020 and September 30, 2019, respectively. Improving economic forecasts in the current quarter reduced the provision for credit losses compared to the first and second quarters of this year. This improvement was offset by an increase in qualitative reserves established for certain loan portfolios, including hospitality and loans that have received principal and interest deferrals.

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•Deposits - Total deposits decreased $23.4 million, or 1.4% on an annualized basis, from the linked quarter to $6.7 billion as of September 30, 2020. Year-over-year, deposits grew $1.1 billion, or 18.7% on an annualized basis, from $5.6 billion as of September 30, 2019. Average deposits totaled $6.7 billion for the quarter ended September 30, 2020 compared to $6.6 billion and $5.6 billion for the linked and prior year quarters, respectively. Deposits attributable to PPP loan fundings primarily contributed to the growth in deposits over the prior year period. Noninterest deposit accounts represented 28.9% of total deposits at September 30, 2020, and the loan to deposit ratio was 91.8% at that date.

•Capital - Total shareholders’ equity was $882.3 million and the tangible common equity to tangible assets ratio was 7.99% at September 30, 2020, compared to 7.81% at June 30, 2020. The Bank’s regulatory capital ratios remain “well-capitalized,” with a common equity tier 1 ratio of 12.0% and a total risk-based capital ratio of 13.3% as of September 30, 2020. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 10.2% and 14.6%, respectively, at September 30, 2020.

The Company suspended its repurchase of shares through the share repurchase plan in March 2020. There are 95,907 shares available for repurchase under the existing authorization.

The Company’s Board of Directors approved a quarterly dividend of $0.18 per common share, payable on December 31, 2020 to shareholders of record as of December 15, 2020.

•Liquidity - The Company maintains a high level of both on-balance-sheet and off-balance-sheet liquidity. At September 30, 2020, on-balance-sheet liquidity consisted of cash and unpledged investment securities of $1.0 billion. Off-balance-sheet liquidity totaled $1.5 billion through the Federal Home Loan Bank, Federal Reserve and correspondent bank lines. The Company also has an unused $25 million revolving line of credit and maintains a shelf registration allowing for the issuance of various forms of equity and debt securities. The $63.3 million subordinated debt issuance in the second quarter 2020 also has enhanced the holding company’s liquidity position.




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Net Interest Income
Average Balance Sheets
The following table presents, 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.
Quarter ended
September 30, 2020June 30, 2020September 30, 2019
($ in thousands)Average
Balance		Interest
Income/
Expense		Average Yield/ RateAverage
Balance		Interest
Income/
Expense		Average Yield/ RateAverage
Balance		Interest
Income/
Expense		Average Yield/ Rate
Assets
Interest-earning assets:
Loans, excluding incremental accretion*$6,112,715 $61,516 4.00 %$6,032,076 $63,869 4.26 %$5,178,009 $69,193 5.30 %
Debt and equity investments*1,361,515 8,761 2.56 1,361,853 9,220 2.72 1,312,860 9,610 2.90 
Short-term investments295,854 113 0.15 177,267 87 0.20 113,214 572 2.00 
Total earning assets7,770,084 70,390 3.60 7,571,196 73,176 3.89 6,604,083 79,375 4.77 
Noninterest-earning assets571,884 587,008 618,274 
Total assets$8,341,968 $8,158,204 $7,222,357 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing transaction accounts$1,529,097 $255 0.07 %$1,487,467 $244 0.07 %$1,356,328 $2,048 0.60 %
Money market accounts1,981,026 1,003 0.20 1,941,874 995 0.21 1,639,603 6,959 1.68 
Savings605,475 45 0.03 590,104 45 0.03 548,109 232 0.17 
Certificates of deposit630,076 2,409 1.52 718,529 3,099 1.73 820,943 3,970 1.92 
Total interest-bearing deposits4,745,674 3,712 0.31 4,737,974 4,383 0.37 4,364,983 13,209 1.20 
Subordinated debentures203,438 2,826 5.53 169,311 2,316 5.50 141,136 1,956 5.50 
FHLB advances250,000 720 1.15 251,231 455 0.73 378,207 2,203 2.31 
Securities sold under agreements to repurchase199,308 59 0.12 192,117 57 0.12 155,238 327 0.84 
Other borrowings31,413 116 1.47 32,842 147 1.80 37,817 337 3.54 
Total interest-bearing liabilities5,429,833 7,433 0.54 5,383,475 7,358 0.55 5,077,381 18,032 1.41 
Noninterest-bearing liabilities:
Demand deposits1,920,694 1,813,760 1,232,360 
Other liabilities105,945 92,806 68,642 
Total liabilities7,456,472 7,290,041 6,378,383 
Shareholders' equity885,496 868,163 843,974 
Total liabilities and shareholders' equity$8,341,968 $8,158,204 $7,222,357 
Core net interest income3
62,957 65,818 61,343 
Core net interest margin3
3.22 %3.50 %3.69 %
Incremental accretion on non-core acquired loans1,235 719 2,140 
Total net interest income$64,192 $66,537 $63,483 
Net interest margin3.29 %3.53 %3.81 %
* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $0.8 million for the three months ended September 30, 2020, $0.7 million for the three months ended June 30, 2020, and $0.4 million for the three months ended September 30, 2019.
3 Core net interest income and core NIM are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.


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Net interest income for the third quarter decreased $2.5 million to $63.4 million from $65.8 million in the linked quarter, and increased $0.3 million from the prior year period. NIM, on a tax equivalent basis, was 3.29% for the third quarter, compared to 3.53% in the linked quarter, and 3.81% in the third quarter of 2019. The decrease from the linked quarter was primarily due to slightly lower rates on non-PPP loans plus the impact of the low yield on PPP loans. Additionally, loan yields for non-PPP loans declined in the linked quarter due to both LIBOR resets as well as lower rates on new loans and renewing loans which, combined, impacted yields by 20 basis points.

Core net interest income and core NIM noted in the table below exclude incremental accretion on non-core acquired loans.
Quarter ended
($ in thousands)September 30,
2020		June 30,
2020		March 31,
2020		December 31,
2019		September 30,
2019
Net interest income$63,354 $65,833 $63,368 $61,613 $63,046 
Less: Incremental accretion income2
1,235 719 1,273 576 2,140 
Core net interest income3
$62,119 $65,114 $62,095 $61,037 $60,906 
Net interest margin (tax equivalent)3.29 %3.53 %3.79 %3.68 %3.81 %
Core net interest margin3 (tax equivalent)
3.22 %3.50 %3.71 %3.64 %3.69 %
2 Represents incremental accretion income on non-core acquired loans which were acquired from the FDIC and previously covered by shared-loss agreements.
3 Core net interest income and core NIM are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

NIM decreased 24 basis points from the linked quarter to 3.29% during the current quarter primarily due to a 29 basis point decrease in earning asset yields. The decrease in the earning asset yield was primarily due to a combination of higher average balances on PPP loans (two bps), lower average balances for non-PPP loans (six bps), and an increase in short-term investment balances (five bps), combined with reduced investment (two bps) and loan (14 bps) yields, each as compared to the linked quarter. The full-quarter impact of $63.3 million of subordinated debentures issued during the second quarter negatively impacted NIM by an additional two basis points.

The cost of interest-bearing liabilities was relatively unchanged from the linked quarter. The Company responded to interest rate trends earlier in the year by reducing the cost of certain managed money market and interest-bearing transaction accounts. Increases in the cost of borrowings were offset by lower balances and rates on brokered and other time deposits.




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Loans
The following table presents total loans for the most recent five quarters:
Quarter ended
($ in thousands)September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
C&I $1,080,860 $1,057,899 $1,186,240 $1,186,667 $1,174,569 
CRE investor owned 1,284,351 1,302,235 1,319,316 1,290,258 1,281,332 
CRE owner occupied 583,430 599,800 584,491 582,579 566,219 
SBA PPP loans 819,100 807,814 — — — 
Enterprise value lendinga
367,337 382,828 440,764 428,896 417,521 
Life insurance premium financinga
517,559 520,705 496,471 472,822 468,051 
Residential real estate 321,482 326,697 346,461 366,261 386,174 
Construction and land development 450,225 455,686 445,909 428,681 403,590 
Tax creditsa
368,908 363,222 354,046 294,210 265,626 
Agriculture190,969 191,093 168,237 139,873 136,249 
Other 142,086 132,072 115,582 124,090 128,683 
Total Loans$6,126,307 $6,140,051 $5,457,517 $5,314,337 $5,228,014 
Total loan yield4.08 %4.31 %5.06 %5.08 %5.47 %
Total C&I loans to total loansb
51 %51 %45 %44 %44 %
Variable interest rate loans to total loansb
50 %51 %60 %59 %60 %
Certain prior period amounts have been reclassified among the categories to conform to the current period presentation
a Specialized categories may include a mix of C&I, CRE, construction and land development, or other loans.
bRatios include the impact of PPP.

Loans totaled $6.1 billion at September 30, 2020, decreasing $13.7 million, or 0.9% on an annualized basis, compared to the linked quarter. Year-over-year, loans increased $898.3 million, or 17.2% on an annualized basis. The year-over-year increase was primarily due to PPP loans. The largest growth categories, excluding PPP, compared to the linked quarter were C&I, other, and tax credits. New loan originations, excluding PPP, and revolving line advances increased during the quarter from the linked quarter, offset by accelerated loan paydowns. Line draw utilization continues to decline. At September 30, 2020 utilization was 40.1% compared to 40.3% and 49.5% at June 30, 2020 and March 31, 2020, respectively.

The Company has implemented several loan programs to assist its customers impacted by the COVID-19 pandemic. These programs include consumer and business deferral programs and expanded small business lines of credit.

The following table presents loan modifications currently in a deferral status at the periods presented:
Quarter ended
($ in thousands)September 30, 2020June 30, 2020
Commercial real estate $48,081 $404,295 
Commercial and industrial46,041 171,108 
Construction real estate44,243 88,369 
Residential real estate974 21,762 
Other12 134 
Total loan modifications$139,351 $685,668 
Percentage of total loans2 %11 %


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Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:
Quarter ended
($ in thousands)September 30,
2020		June 30,
2020		March 31,
2020		December 31,
2019		September 30,
2019
Nonperforming loans$39,623 $41,473 $37,204 $26,425 $15,569 
Other real estate4,835 4,874 5,072 6,344 8,498 
Nonperforming assets$44,458 $46,347 $42,276 $32,769 $24,067 
Nonperforming loans to total loans0.65 %0.68 %0.68 %0.50 %0.30 %
Nonperforming assets to total assets0.53 %0.55 %0.56 %0.45 %0.33 %
Allowance for loan losses to total loans2.01 %1.80 %1.69 %0.81 %0.85 %
Net charge-offs $1,027 $309 $1,183 $2,544 $1,070 

Nonperforming loans decreased $1.9 million to $39.6 million at September 30, 2020 from $41.5 million at June 30, 2020. Activity during the current quarter primarily included additions of $10.5 million, paydowns of $9.7 million, and charge-offs of $2.6 million. The addition of $10.5 million during the quarter was primarily from one $8.7 million hotel loan that went on nonaccrual. Other real estate decreased slightly during the third quarter 2020 due to write-downs and sales of $0.3 million offset by one addition of $0.3 million.

The Company recorded a provision for credit losses of $14.1 million for the third quarter 2020 compared to $19.6 million for the linked quarter and $1.8 million for the prior year quarter. The provision for credit losses in the third quarter 2020 was primarily due an increase in individual reserves and qualitative reserves for certain higher-risk loan portfolios. To the extent that the Company does not recognize charge-offs and economic forecasts improve in future periods, the Company could recognize a reversal of provision for credit losses. Conversely, if economic conditions and the Company’s forecast continue to worsen, the Company could recognize elevated levels of provision for credit losses.

Deposits
The following table presents deposits broken out by type for the most recent five quarters:
Quarter ended
($ in thousands)September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
Noninterest-bearing accounts$1,929,540 $1,965,868 $1,354,571 $1,327,348 $1,295,450 
Interest-bearing transaction accounts1,499,756 1,508,535 1,389,603 1,367,444 1,307,855 
Money market and savings accounts2,634,885 2,566,011 2,479,828 2,249,784 2,201,052 
Brokered certificates of deposit65,209 85,414 170,667 215,758 209,754 
Other certificates of deposit546,836 573,752 595,237 610,689 610,269 
Total deposit portfolio$6,676,226 $6,699,580 $5,989,906 $5,771,023 $5,624,380 
Noninterest-bearing deposits to total deposits28.9 %29.3 %22.6 %23.0 %23.0 %

Total deposits at September 30, 2020 were $6.7 billion, a decrease of $23.4 million from June 30, 2020, and an increase of $1.1 billion from September 30, 2019.


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Core deposits, defined as total deposits excluding certificates of deposits, were $6.1 billion at September 30, 2020, an increase of $23.8 million from the linked quarter. Money market and savings accounts increased $68.9 million as compared to the linked quarter while all other accounts declined. Noninterest-bearing deposits were $1.9 billion at September 30, 2020, a decrease of $36.3 million compared to June 30, 2020, and an increase of $634.1 million compared to September 30, 2019. Certificates of deposit decreased $47.1 million from the linked quarter and $208.0 million from the prior year quarter. The total cost of deposits was 0.22% for the current quarter compared to 0.27% and 0.94% for the linked quarter and prior year quarter, respectively.

Noninterest Income
The following table presents a comparative summary of the major components of noninterest income for the periods indicated:
Linked quarter comparisonPrior year comparison
Quarter ended Quarter ended
($ in thousands)September 30, 2020June 30, 2020Increase (decrease)September 30, 2019Increase (decrease)
Service charges on deposit accounts$2,798 $2,616 $182 7 %$3,246 $(448)(14)%
Wealth management revenue2,456 2,326 130 6 %2,661 (205)(8)%
Card services revenue2,498 2,225 273 12 %2,494 4 — %
Tax credit income 748 (221)969 438 %1,238 (490)(40)%
Miscellaneous income4,129 3,014 1,115 37 %3,925 204 5 %
Total noninterest income$12,629 $9,960 $2,669 27 %$13,564 $(935)(7)%

Total noninterest income for third quarter 2020 was $12.6 million, an increase of $2.7 million from the linked quarter and a decrease of $0.9 million from the prior year quarter. The increase from the linked quarter was primarily due to improved transaction volumes for deposit service charges and card services, increased tax credit income and continued growth in mortgage revenue.

Noninterest Expenses
Noninterest expense was $39.5 million for the third quarter 2020, compared to $37.9 million for the linked quarter, and $38.2 million for the third quarter 2019. The increase from the linked quarter and prior year quarter was primarily due to merger-related expenses of $1.6 million.
For the third quarter 2020, the Company’s efficiency ratio was 52.0% compared to 50.0% and 49.9% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio4 was 51.0% for the quarter ended September 30, 2020, compared to 50.7% for the linked quarter and 51.7% for the prior year quarter.
4 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

Income Taxes
The Company’s effective tax rate was 20% for each of the quarters ended September 30, 2020, the linked quarter and prior year quarter.



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Capital
The following table presents various EFSC capital ratios:
Quarter ended
PercentSeptember 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
Total risk-based capital to risk-weighted assets14.6 %14.4 %12.9 %12.9 %12.7 %
Tier 1 capital to risk weighted assets11.6 %11.4 %11.0 %11.4 %11.2 %
Common equity tier 1 capital to risk-weighted assets10.2 %9.9 %9.6 %9.9 %9.6 %
Tangible common equity to tangible assets5
8.0 %7.8 %8.4 %8.9 %8.5 %
5 Tangible common equity to tangible assets is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

The Company’s strong earnings profile continues to build total capital even with the elevated level of provision for credit losses in 2020. The growth in the balance sheet due to PPP did not negatively impact the Company’s regulatory capital ratios due to the SBA guarantee. The issuance of subordinated debt during the second quarter of 2020 enhanced total risk-based capital. Capital ratios for the current quarter are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

Use of Non-GAAP Financial Measures
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 core net interest income, core net interest margin, tangible common equity, core efficiency ratios, ROATCE, PPNR, financial metrics adjusted for PPP impact, 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 income, core net interest margin, core efficiency ratio, ROATCE, PPNR, financial metrics adjusted for PPP impact, and the tangible common equity ratio, collectively “core performance measures,” presented in this 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 shared-loss 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-

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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 10:00 a.m. Central Time on Tuesday, October 20, 2020. During the call, management will review the third quarter of 2020 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” prior to the scheduled broadcast of the conference call. The call can be accessed via this same website page, or via telephone at 1-800-353-6461 (Conference ID #6978860). A recorded replay of the conference call will be available on the website two hours after the call’s completion. Visit http://bit.ly/EFSC3Q2020earnings 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 $8 billion in assets, is a financial holding company headquartered in Clayton, Missouri. Enterprise Bank & Trust, a Missouri state-chartered trust company with banking powers and a wholly-owned subsidiary of EFSC, 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.

On August 20, 2020, the Company and its wholly-owned subsidiary bank, Enterprise Bank & Trust, entered into a definitive agreement with Seacoast Commerce Banc Holdings (“Seacoast”) and its wholly-owned bank subsidiary, Seacoast Commerce Bank (“Seacoast Bank”), pursuant to which the Company will acquire Seacoast and Seacoast Bank. Pursuant to the terms of the definitive agreement, upon consummation of the proposed transaction, Seacoast shareholders will receive 0.5061 shares of EFSC common stock for each share of Seacoast common stock they hold. Headquartered in San Diego, California, Seacoast had approximately $1.3 billion in total assets, $1.1 billion in loans, and $1.0 billion in deposits as of June 30, 2020 and operates four full-service banking offices in San Diego, California and one in Las Vegas, Nevada. In addition, Seacoast has 20 loan production offices and six deposit production offices across the country. As of June 30, 2020, Seacoast Bank was ranked as the 8th largest Small Business Administration lender in the nation and has a history of both strong revenue and earnings growth in recent years. The proposed transaction has been approved by the Federal Reserve and FDIC, and remains subject to the approval of Seacoast’s shareholders. The Company expects to consummate the proposed transaction in the fourth quarter of 2020.

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 Seacoast acquisition 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,”

10

“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. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways.  Other factors that could cause or contribute to such differences include, but are not limited to, the Company’s ability to efficiently integrate acquisitions, including the Seacoast acquisition, 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 policies and practices or accounting standards, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss (“CECL”) model, which changed how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption on January 1, 2020, uncertainty regarding the future of LIBOR, natural disasters, war or terrorist activities, or pandemics, or the outbreak of COVID-19 or similar outbreaks, and their effects on economic and business environments in which we operate, as well as other risk factors described in the Company’s 2019 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.

Notice to Seacoast Shareholders

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

In connection with EFSC’s proposed acquisition of Seacoast, EFSC filed a registration statement on Form S-4 (File No. 333-248758) (the “Registration Statement”) with the SEC. The Registration Statement includes a preliminary proxy statement of Seacoast and a preliminary prospectus of EFSC, which are jointly referred to as the proxy statement/prospectus, as well as other relevant documents concerning the proposed transaction. The Registration Statement was declared effective by the SEC on September 28, 2020.

SHAREHOLDERS OF SEACOAST ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE ACQUISITION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION AND RELATED MATTERS.

The final proxy statement/prospectus was mailed to Seacoast’s shareholders of recorded as of the close of business on September 24, 2020. Investors and security holders will be able to obtain the Registration Statement, the proxy statement/prospectus, and any other documents EFSC has filed with the SEC, free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by EFSC are available free of charge by (1) accessing EFSC’s website at www.enterprisebank.com under the “Investor Relations” link, (2) writing EFSC at 150 North Meramec, Clayton, Missouri 63105, Attention: Investor Relations, or (3) writing Seacoast at 11939 Rancho Bernardo Road, Suite 200, San Diego, CA 92128, Attention: Chief Financial Officer.

11


Participants in Solicitation

EFSC and Seacoast and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Seacoast in connection with the proposed merger. Information about the directors and executive officers of EFSC is set forth in the proxy statement for EFSC’s 2020 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 25, 2020 and as amended by supplements to the proxy statement filed with the SEC on March 25, 2020 and April 15, 2020. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed acquisition. Free copies of this document may be obtained as described in the preceding paragraph.

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

12

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
Quarter endedNine Months ended
(in thousands, except per share data)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Sep 30,
2020		Sep 30,
2019
EARNINGS SUMMARY
Net interest income$63,354 $65,833 $63,368 $61,613 $63,046 $192,555 $177,104 
Provision for credit losses14,080 19,591 22,264 1,341 1,833 55,935 5,031 
Noninterest income12,629 9,960 13,408 14,418 13,564 35,997 34,758 
Noninterest expense39,524 37,912 38,673 38,354 38,239 116,109 127,131 
Income before income tax expense22,379 18,290 15,839 36,336 36,538 56,508 79,700 
Income tax expense4,428 3,656 2,971 7,246 7,469 11,055 16,051 
Net income$17,951 $14,634 $12,868 $29,090 $29,069 $45,453 $63,649 
Diluted earnings per share$0.68 $0.56 $0.48 $1.09 $1.08 $1.73 $2.45 
Return on average assets0.86 %0.72 %0.70 %1.58 %1.60 %0.76 %1.26 %
Return on average common equity8.06 %6.78 %5.98 %13.43 %13.66 %6.96 %11.00 %
Return on average tangible common equity10.94 %9.28 %8.22 %18.54 %19.08 %9.51 %15.16 %
Net interest margin (tax equivalent)3.29 %3.53 %3.79 %3.68 %3.81 %3.52 %3.85 %
Core net interest margin (tax equivalent)1
3.22 %3.50 %3.71 %3.64 %3.69 %3.47 %3.76 %
Efficiency ratio52.02 %50.02 %50.37 %50.45 %49.91 %50.80 %60.01 %
Core efficiency ratio1
51.04 %50.66 %51.21 %50.73 %51.73 %50.97 %52.96 %
Total assets$8,367,976 $8,357,501 $7,500,643 $7,333,791 $7,346,791 
Total average assets8,341,968 8,158,204 7,363,605 7,322,496 7,222,357 $7,956,006 $6,749,988 
Total deposits6,676,226 6,699,580 5,989,906 5,771,023 5,624,380 
Total average deposits6,666,368 6,551,734 5,837,717 5,756,292 5,597,343 6,353,087 5,296,257 
Period end common shares outstanding26,210 26,196 26,161 26,543 26,613 
Dividends per common share$0.18 $0.18 $0.18 $0.17 $0.16 $0.54 $0.45 
Tangible book value per common share$24.80 $24.22 $23.38 $23.76 $22.82 
Tangible common equity to tangible assets1
7.99 %7.81 %8.42 %8.89 %8.54 %
Total risk-based capital to risk-weighted assets14.6 %14.4 %12.8 %12.9 %12.7 %
1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.



13

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
Quarter endedNine Months ended
($ in thousands, except per share data)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Sep 30,
2020		Sep 30,
2019
INCOME STATEMENTS
NET INTEREST INCOME
Total interest income$70,787 $73,191 $76,688 $77,238 $81,078 $220,666 $227,896 
Total interest expense7,433 7,358 13,320 15,625 18,032 28,111 50,792 
Net interest income63,354 65,833 63,368 61,613 63,046 192,555 177,104 
Provision for credit losses14,080 19,591 22,264 1,341 1,833 55,935 5,031 
Net interest income after provision for credit losses49,274 46,242 41,104 60,272 61,213 136,620 172,073 
NONINTEREST INCOME
Deposit service charges2,798 2,616 3,143 3,254 3,246 8,557 9,547 
Wealth management revenue2,456 2,326 2,501 2,618 2,661 7,283 7,314 
Card services revenue2,498 2,225 2,247 2,409 2,494 6,970 6,745 
Tax credit income 748 (221)2,036 3,425 1,238 2,563 1,968 
Other income4,129 3,014 3,481 2,712 3,925 10,624 9,184 
Total noninterest income12,629 9,960 13,408 14,418 13,564 35,997 34,758 
NONINTEREST EXPENSE
Employee compensation and benefits22,040 22,389 21,685 20,411 20,845 66,114 60,884 
Occupancy3,408 3,185 3,347 3,461 3,179 9,940 9,004 
Merger-related expenses1,563 — — — 393 1,563 17,969 
Other12,513 12,338 13,641 14,482 13,822 38,492 39,274 
Total noninterest expense39,524 37,912 38,673 38,354 38,239 116,109 127,131 
Income before income tax expense22,379 18,290 15,839 36,336 36,538 56,508 79,700 
Income tax expense4,428 3,656 2,971 7,246 7,469 11,055 16,051 
Net income$17,951 $14,634 $12,868 $29,090 $29,069 $45,453 $63,649 
Basic earnings per share$0.68 $0.56 $0.49 $1.10 $1.09 $1.73 $2.46 
Diluted earnings per share$0.68 $0.56 $0.48 $1.09 $1.08 $1.73 $2.45 


14

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
    
Quarter ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019
BALANCE SHEETS
ASSETS
Cash and due from banks$98,816 $100,804 $98,619 $74,769 $153,730 
Interest-earning deposits301,773 254,830 88,794 96,217 106,747 
Debt and equity investments1,375,931 1,387,001 1,382,149 1,354,527 1,354,986 
Loans held for sale14,032 16,029 8,430 5,570 6,281 
Loans6,126,307 6,140,051 5,457,517 5,314,337 5,228,014 
   Less: Allowance for loan losses123,270 110,270 92,187 43,288 44,555 
Total loans, net6,003,037 6,029,781 5,365,330 5,271,049 5,183,459 
Fixed assets, net56,807 58,231 59,358 60,013 59,216 
Goodwill210,344 210,344 210,344 210,344 211,251 
Intangible assets, net21,820 23,196 24,585 26,076 27,626 
Other assets285,416 277,285 263,034 235,226 243,495 
Total assets$8,367,976 $8,357,501 $7,500,643 $7,333,791 $7,346,791 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits$1,929,540 $1,965,868 $1,354,571 $1,327,348 $1,295,450 
Interest-bearing deposits4,746,686 4,733,712 4,635,335 4,443,675 4,328,930 
Total deposits6,676,226 6,699,580 5,989,906 5,771,023 5,624,380 
Subordinated debentures203,510 203,384 141,336 141,258 141,179 
FHLB advances250,000 250,000 222,000 222,406 461,426 
Other borrowings239,038 227,961 205,918 265,172 199,634 
Other liabilities116,935 108,613 95,047 66,747 74,077 
Total liabilities7,485,709 7,489,538 6,654,207 6,466,606 6,500,696 
Shareholders’ equity882,267 867,963 846,436 867,185 846,095 
Total liabilities and shareholders’ equity$8,367,976 $8,357,501 $7,500,643 $7,333,791 $7,346,791 
























15

Average Balance Sheets
The following table presents, 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.
Nine Months ended
September 30, 2020September 30, 2019
($ in thousands)Average
Balance		Interest
Income/
Expense		Average Yield/ RateAverage
Balance		Interest
Income/
Expense		Average Yield/ Rate
Assets
Interest-earning assets:
Loans, excluding incremental accretion*$5,833,368 $191,403 4.38 %$4,930,635 $197,996 5.37 %
Debt and equity investments*1,356,796 27,688 2.73 1,153,632 25,055 2.90 
Short-term investments188,849 500 0.35 108,930 1,722 2.11 
Total earning assets7,379,013 219,591 3.98 6,193,197 224,773 4.85 
Noninterest-earning assets576,993 556,791 
Total assets$7,956,006 $6,749,988 
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing transaction accounts$1,464,144 $1,836 0.17 %$1,273,591 $5,972 0.63 %
Money market accounts1,911,584 6,738 0.47 1,579,702 20,470 1.73 
Savings579,619 233 0.05 471,024 646 0.18 
Certificates of deposit713,633 9,176 1.72 783,182 11,060 1.89 
Total interest-bearing deposits4,668,980 17,983 0.51 4,107,499 38,148 1.24 
Subordinated debentures171,465 7,061 5.50 135,512 5,562 5.49 
FHLB advances240,596 2,070 1.15 286,267 5,297 2.47 
Securities sold under agreements to repurchase197,776 479 0.32 168,740 939 0.74 
Other borrowed funds32,836 518 2.11 31,102 846 3.64 
Total interest-bearing liabilities5,311,653 28,111 0.71 4,729,120 50,792 1.44 
Noninterest-bearing liabilities:
Demand deposits1,684,107 1,188,758 
Other liabilities87,302 58,267 
Total liabilities7,083,062 5,976,145 
Shareholders' equity872,944 773,843 
Total liabilities and shareholders' equity$7,956,006 $6,749,988 
Core net interest income1
191,480 173,981 
Core net interest margin1
3.47 %3.76 %
Incremental accretion on non-core acquired loans3,227 4,207 
Total net interest income$194,707 $178,188 
Net interest margin3.52 %3.85 %
* Non-taxable income is presented on a tax-equivalent basis using a 24.7% tax rate. The tax-equivalent adjustments were $2.2 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively.




16

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
Quarter ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019
LOAN PORTFOLIO
Commercial and industrial$3,152,394 $3,143,197 $2,469,013 $2,361,157 $2,303,495 
Commercial real estate2,027,886 2,048,444 2,048,357 1,997,321 1,967,888 
Construction real estate474,727 481,221 469,627 457,273 433,486 
Residential real estate321,792 326,992 346,758 366,261 386,173 
Other149,508 140,197 123,762 132,325 136,972 
Total loans$6,126,307 $6,140,051 $5,457,517 $5,314,337 $5,228,014 
DEPOSIT PORTFOLIO
Noninterest-bearing accounts$1,929,540 $1,965,868 $1,354,571 $1,327,348 $1,295,450 
Interest-bearing transaction accounts1,499,756 1,508,535 1,389,603 1,367,444 1,307,855 
Money market and savings accounts2,634,885 2,566,011 2,479,828 2,249,784 2,201,052 
Brokered certificates of deposit65,209 85,414 170,667 215,758 209,754 
Other certificates of deposit546,836 573,752 595,237 610,689 610,269 
Total deposit portfolio$6,676,226 $6,699,580 $5,989,906 $5,771,023 $5,624,380 
AVERAGE BALANCES
Total loans$6,112,715 $6,032,076 $5,352,243 $5,279,500 $5,178,009 
Debt and equity investments1,361,515 1,361,853 1,346,968 1,322,017 1,312,860 
Interest-earning assets7,770,084 7,571,196 6,791,459 6,704,506 6,604,083 
Total assets8,341,968 8,158,204 7,363,605 7,322,496 7,222,357 
Deposits6,666,368 6,551,734 5,837,717 5,756,292 5,597,343 
Shareholders’ equity885,496 868,163 865,035 859,674 843,974 
Tangible common equity1
652,663 633,946 629,390 622,502 604,331 
YIELDS (tax equivalent)
Total loans4.08 %4.31 %5.06 %5.08 %5.47 %
Debt and equity investments2.56 2.72 2.90 2.91 2.90 
Interest-earning assets3.67 3.93 4.58 4.60 4.90 
Interest-bearing deposits0.31 0.37 0.88 1.05 1.20 
Total deposits0.22 0.27 0.68 0.81 0.94 
Subordinated debentures5.53 5.50 5.46 5.46 5.50 
FHLB advances and other borrowed funds0.74 0.56 1.33 1.57 1.99 
Interest-bearing liabilities0.54 0.55 1.05 1.23 1.41 
Net interest margin3.29 3.53 3.79 3.68 3.81 
1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.


17

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
Quarter ended
(in thousands, except per share data)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019
ASSET QUALITY
Net charge-offs$1,027 $309 $1,183 $2,544 $1,070 
Nonperforming loans39,623 41,473 37,204 26,425 15,569 
Classified assets84,710 96,678 104,754 85,897 93,984 
Nonperforming loans to total loans0.65 %0.68 %0.68 %0.50 %0.30 %
Nonperforming assets to total assets0.53 %0.55 %0.56 %0.45 %0.33 %
Allowance for loan losses to total loans2.01 %1.80 %1.69 %0.81 %0.85 %
Allowance for loan losses to nonperforming loans311.1 %265.9 %247.8 %163.8 %286.2 %
Net charge-offs to average loans (annualized)0.07 %0.02 %0.09 %0.19 %0.08 %
WEALTH MANAGEMENT
Trust assets under management$1,641,980 $1,602,358 $1,445,521 $1,671,082 $1,583,260 
Trust assets under administration2,433,026 2,455,111 2,139,673 2,524,478 2,404,950 
MARKET DATA
Book value per common share$33.66 $33.13 $32.36 $32.67 $31.79 
Tangible book value per common share1
$24.80 $24.22 $23.38 $23.76 $22.82 
Market value per share$27.27 $31.12 $27.91 $48.21 $40.75 
Period end common shares outstanding26,210 26,196 26,161 26,543 26,613 
Average basic common shares26,217 26,180 26,473 26,540 26,778 
Average diluted common shares26,228 26,195 26,539 26,668 26,868 
CAPITAL
Total risk-based capital to risk-weighted assets14.6 %14.4 %12.9 %12.9 %12.7 %
Tier 1 capital to risk-weighted assets11.6 %11.4 %11.0 %11.4 %11.2 %
Common equity tier 1 capital to risk-weighted assets10.2 %9.9 %9.6 %9.9 %9.6 %
Tangible common equity to tangible assets1
8.0 %7.8 %8.4 %8.9 %8.5 %
1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

18

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Quarter endedNine Months ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Sep 30,
2020		Sep 30,
2019
CORE PERFORMANCE MEASURES
Net interest income$63,354 $65,833 $63,368 $61,613 $63,046 $192,555 $177,104 
Less: Incremental accretion income1,235 719 1,273 576 2,140 3,227 4,207 
Core net interest income62,119 65,114 62,095 61,037 60,906 189,328 172,897 
Total noninterest income12,629 9,960 13,408 14,418 13,564 35,997 34,758 
Less: Other income from non-core acquired assets— — — 4 1,001 — 1,368 
Less: Gain on sale of investment securities417 — 4 (94)337 421 337 
Less: Other non-core income— 265 — — — 265 266 
Core noninterest income12,212 9,695 13,404 14,508 12,226 35,311 32,787 
Total core revenue74,331 74,809 75,499 75,545 73,132 224,639 205,684 
Total noninterest expense39,524 37,912 38,673 38,354 38,239 116,109 127,131 
Less: Other expenses related to non-core acquired loans25 12 12 33 18 49 224 
Less: Merger-related expenses1,563 — — — 393 1,563 17,969 
Core noninterest expense37,936 37,900 38,661 38,321 37,828 114,497 108,938 
Core efficiency ratio51.04 %50.66 %51.21 %50.73 %51.73 %50.97 %52.96 %
NET INTEREST MARGIN TO CORE NET INTEREST MARGIN (TAX EQUIVALENT)
Net interest income$64,192 $66,537 $63,978 $62,141 $63,483 $194,707 $178,188 
Less: Incremental accretion income1,235 719 1,273 576 2,140 3,227 4,207 
Core net interest income$62,957 $65,818 $62,705 $61,565 $61,343 $191,480 $173,981 
Average earning assets$7,770,084 $7,571,196 $6,791,459 $6,704,506 $6,604,083 $7,379,012 $6,193,197 
Reported net interest margin3.29 %3.53 %3.79 %3.68 %3.81 %3.52 %3.85 %
Core net interest margin3.22 %3.50 %3.71 %3.64 %3.69 %3.47 %3.76 %
Quarter ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019
SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity$882,267 $867,963 $846,436 $867,185 $846,095 
Less: Goodwill210,344 210,344 210,344 210,344 211,251 
Less: Intangible assets21,820 23,196 24,585 26,076 27,626 
Tangible common equity$650,103 $634,423 $611,507 $630,765 $607,218 
Total assets$8,367,976 $8,357,501 $7,500,643 $7,333,791 $7,346,791 
Less: Goodwill210,344 210,344 210,344 210,344 211,251 
Less: Intangible assets21,820 23,196 24,585 26,076 27,626 
Tangible assets$8,135,812 $8,123,961 $7,265,714 $7,097,371 $7,107,914 
Tangible common equity to tangible assets7.99 %7.81 %8.42 %8.89 %8.54 %

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Quarter Ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Sep 30,
2019
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity$885,496 $868,163 $843,974 
Less average goodwill210,344 210,344 211,251 
Less average intangible assets22,489 23,873 28,392 
Average tangible common equity$652,663 $633,946 $604,331 
Quarter Ended
($ in thousands)Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019
CALCULATION OF PRE-PROVISION NET REVENUE
Net interest income$63,354 $65,833 $63,368 $61,613 $63,046 
Noninterest income12,629 9,960 13,408 14,418 13,564 
Less: Noninterest expense39,524 37,912 38,673 38,354 38,239 
Merger-related expenses1,563 — — — 393 
PPNR (excluding merger-related expenses)$38,022 $37,881 $38,103 $37,677 $38,764 

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Quarter EndedQuarter Ended
($ in thousands, except per share data)Sep 30,
2020		Jun 30,
2020
IMPACT OF PAYCHECK PROTECTION PROGRAM
Net income - GAAP$17,951 $14,634 
PPP interest and fee income(5,226)(4,083)
Related tax effect1,291 1,009 
Adjusted net income - Non-GAAP$14,016 $11,560 
Average diluted common shares26,228 26,195 
EPS - GAAP net income$0.68 $0.56 
EPS - Adjusted net income$0.53 $0.44 
Average assets - GAAP$8,341,968 $8,158,204 
Average PPP loans, net(813,244)(634,632)
Adjusted average assets - Non-GAAP$7,528,724 $7,523,572 
ROAA - GAAP net income0.86 %0.72 %
ROAA - Adjusted net income, adjusted average assets0.74 %0.62 %
PPNR (excluding merger-related expenses) - Non-GAAP (see reconciliation above)$38,022 $37,881 
PPP interest and fees(5,226)(4,083)
Adjusted PPNR (excluding merger-related expenses) - Non-GAAP$32,796 $33,798 
PPNR ROAA (excluding merger-related expenses) - PPNR (excluding merger-related expenses)1.81 %1.87 %
PPNR ROAA (excluding merger-related expenses) - adjusted PPNR (excluding merger-related expenses), adjusted average assets1.73 %1.81 %
Tangible assets - Non-GAAP (see reconciliation above)$8,135,812 $8,123,961 
PPP loans outstanding, net(819,100)(807,814)
Adjusted tangible assets - Non-GAAP$7,316,712 $7,316,147 
Tangible common equity Non - GAAP (see reconciliation above)$650,103 $634,423 
Tangible common equity to tangible assets7.99 %7.81 %
Tangible common equity to tangible assets - adjusted tangible assets8.89 %8.67 %
Average assets for leverage ratio$8,115,020 $7,928,286 
Average PPP loans, net(813,244)(634,632)
Adjusted average assets for leverage ratio - Non-GAAP$7,301,776 $7,293,654 
Tier 1 capital$745,397 $726,574 
Leverage ratio9.2 %9.2 %
Leverage ratio - adjusted average assets for leverage ratio10.2 %10.0 %
Net interest income - tax equivalent$64,192 $66,537 
PPP interest and fees(5,226)(4,083)
Adjusted net interest income - tax equivalent$58,966 $62,454 
Average earning assets -GAAP$7,770,084 $7,571,196 
Average PPP loans, net(813,244)(634,632)
Adjusted average earning assets - Non-GAAP$6,956,840 $6,936,564 
Net interest margin - tax equivalent3.29 %3.53 %
Net interest margin - tax equivalent - adjusted net interest income, adjusted average earning assets3.37 %3.62 %
Loans - GAAP$6,126,307 $6,140,051 
PPP loans outstanding, net(819,100)(807,814)
Adjusted loans - Non-GAAP$5,307,207 $5,332,237 
Allowance for credit losses on loans$123,270 $110,270 
Allowance for credit losses on loans/loans - GAAP2.01 %1.80 %
Allowance for credit losses on loans/loans - adjusted loans2.32 %2.07 %


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