EX-99.1 2 ef71821ex991.htm EXHIBIT 99.1

Exhibit 99.1

For more information, contact:
Kevin Eichner (314) 725 5500
Frank Sanfilippo (314) 725 5500
Melissa Sturges (816) 221 7500

 

ENTERPRISE FINANCIAL REPORTS 22% INCREASE IN FIRST QUARTER EARNINGS PER SHARE

 

Millennium Contributes $1.8 million to Wealth Management Revenue While Portfolio Loans Grow at a 25% Annualized Rate

 

St. Louis, April 17, 2006 – Enterprise Financial Services Corp (NASDAQ: EFSC), the parent company of Enterprise Bank & Trust, reported net income of $3.0 million or $0.28 per fully diluted share for the first quarter of 2006 versus $2.4 million or $0.23 per fully diluted share in the same quarter of 2005—a 22% increase.

“EFSC recorded another very robust quarter with continued record growth in earnings, EPS, loan and deposit volumes, and in wealth management revenues,” commented Enterprise Financial President & CEO, Kevin Eichner. “We continue to execute against the plans we have made public, and are grateful that the market continues to reward that execution in the form of client response and in shareholder returns. We were especially pleased to see our ratio of fee income to total revenue jump from 15% in the same period of 2005 to 26% this quarter. This remains a key strategic objective for our company as this ratio can be a major driver of profitability.”

Net interest income increased $734,000 or 7% in the first quarter of 2006 versus 2005. Portfolio loans grew by $64 million - a 25% annualized growth rate from December 31, 2005 and were up $93 million or 10% from the prior year. Deposits totaled $1.04 billion at quarter end versus $937 million in the same period of 2005, an increase of 11%. Notably, the company’s ratio of non-interest bearing deposits to total deposits remained at a very favorable 19% level as the company continued to protect its core funding advantages.

The tax-equivalent net interest rate margin was 3.99% in the first quarter of 2006, down from 4.18% a year ago. This decline was primarily due to a refinement in the company’s accounting for loan fees and direct origination costs, which negatively affected the margin calculation. There was a corresponding positive offset in salaries and benefits expense.

Asset quality continues to be a highlight for Enterprise. The company experienced net recoveries of $174,000 during the first quarter of 2006 versus net recoveries of $188,000 for the same period last year. The loan loss provision in the first quarter of 2006 was $800,000, compared to $786,000 in the same quarter last year. Provision levels remained flat due to similar levels of loan growth and the company’s overall credit risk profile. Nonperforming loans were $1.4 million or 13 basis points of total loans at March 31, 2006 versus 32 basis points at March 31, 2005. The allowance for loan losses represented 1.31% of loans at March 31, 2006. This compares to 1.30% at year end 2005 and one year ago.


As mentioned, the company’s ratio of fee income to total revenue rose to 26% versus 15% in the same period of 2005 as the company’s Wealth Management business continued to grow at a record pace. Wealth Management revenue increased 174% from $1.2 million in the first quarter of 2005 to $3.3 million in the first quarter of 2006. Assets under administration were $1.5 billion at March 31, 2006, a 32% increase over March 31, 2005 after adjusting for the $250 million in common trust fund assets that were distributed in December 2005 in accordance with a related contract. Approximately $1.8 million of the increase in Wealth Management revenue over the prior year is attributable to the company’s Millennium Brokerage Group LLC (“Millennium”) acquired in October of 2005.

Millennium represented a significant contribution to the Wealth Management line of business growth rate despite dealing with the effects of dramatically slower turn-around times on life insurance cases submitted to certain core carriers and a significantly delayed commission payout due from one large carrier (which was received and will be recognized in second quarter 2006 revenue). Paid life insurance premium production volumes continued at expected or better rates in the quarter.

A rising earnings credit rate on commercial accounts was more than offset by increased account activity, resulting in deposit service charges rising 4% in the first quarter as compared to the same quarter in 2005. This further enhanced the company’s fee income ratio.

Noninterest expenses increased from $7.7 million in the first quarter of 2005 to $9.3 million in the same quarter of 2006. Approximately $873,000 of this $1.6 million increase was related to the addition of Millennium (including the amortization of intangibles) and the remainder was primarily connected with expenses associated with the company’s growth and success (e.g. commissions, technology upgrades, and the addition of higher level production and support personnel). For the first quarter ended March 31, 2006, the company’s efficiency ratio was 61.0%, versus 62.4% for the same period in the prior year.

“Our company is off to a fine start in 2006, and we look forward to a strong year in both our Banking and Wealth Management business segments. We are also very pleased with the positive reaction to our announced acquisition of NorthStar Bancshares Inc. on March 23 in Kansas City, as we seek to expand our presence there,” said Eichner.

Enterprise Financial operates commercial banking and wealth management businesses in metropolitan St. Louis and Kansas City, with a primary focus on serving the needs of privately held businesses, their owners and other success-minded individuals. The Company’s stock is listed nationally on NASDAQ under the symbol EFSC.

Please refer to the Consolidated Financial Summary attached for more details.

###

Readers should note that in addition to the historical information contained herein, this press release may contain forward-looking statements which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. Factors that could cause or contribute to such differences include, but are not limited to, burdens imposed by federal and state regulations of banks, credit risk, exposure to local economic conditions, risks associated with rapid increase or decrease in prevailing interest rates and competition from banks and other financial institutions, as well as those in Enterprise Financial’s 2005 Annual Report on Form 10-K.

- 2 -


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY
(Unaudited)

($ In thousands, except per share data)

 

 

For the Quarter Ended

 

 

 

 

 

 

Mar 31,
2006

 

Dec 31,
2005

 

Sep 30,
2005

 

Jun 30,
2005

 

Mar 31,
2005

 

 

 

 

 

 

 

 

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

19,429

 

$

19,611

 

$

17,611

 

$

16,232

 

$

14,654

 

Total interest expense

 

 

8,172

 

 

7,728

 

 

6,452

 

 

5,230

 

 

4,131

 

 

 

 

 

 

 

 

Net interest income

 

 

11,257

 

 

11,883

 

 

11,159

 

 

11,002

 

 

10,523

 

Provision for loan loss

 

 

800

 

 

70

 

 

408

 

 

226

 

 

786

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

 

10,457

 

 

11,813

 

 

10,751

 

 

10,776

 

 

9,737

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management revenue

 

 

3,319

 

 

2,370

 

 

1,472

 

 

1,471

 

 

1,212

 

Deposit service charges

 

 

501

 

 

512

 

 

533

 

 

537

 

 

483

 

Gain on sale of mortgage loans

 

 

23

 

 

34

 

 

145

 

 

80

 

 

22

 

Gain on sale of other real estate

 

 

—  

 

 

—  

 

 

91

 

 

—  

 

 

—  

 

Loss on sale of securities

 

 

—  

 

 

(409

)

 

(85

)

 

—  

 

 

—  

 

Other income

 

 

134

 

 

121

 

 

121

 

 

137

 

 

119

 

 

 

 

 

 

 

 

Total noninterest income

 

 

3,977

 

 

2,628

 

 

2,277

 

 

2,225

 

 

1,836

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

5,801

 

 

6,027

 

 

5,503

 

 

5,402

 

 

5,198

 

Occupancy

 

 

611

 

 

675

 

 

568

 

 

554

 

 

530

 

Furniture and equipment

 

 

250

 

 

248

 

 

212

 

 

188

 

 

172

 

Other

 

 

2,632

 

 

2,960

 

 

2,242

 

 

2,027

 

 

1,817

 

 

 

 

 

 

 

 

Total noninterest expense

 

 

9,294

 

 

9,910

 

 

8,525

 

 

8,171

 

 

7,717

 

Minority interest in net income of consolidated subsidiary

 

 

(453

)

 

(113

)

 

—  

 

 

—  

 

 

—  

 

 

 

 

 

 

 

 

Income before income tax

 

 

4,687

 

 

4,418

 

 

4,503

 

 

4,830

 

 

3,856

 

Income taxes

 

 

1,689

 

 

1,589

 

 

1,625

 

 

1,689

 

 

1,409

 

 

 

 

 

 

 

 

Net income

 

$

2,998

 

$

2,829

 

$

2,878

 

$

3,141

 

$

2,447

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.29

 

$

0.27

 

$

0.29

 

$

0.31

 

$

0.25

 

Diluted earnings per share

 

$

0.28

 

$

0.26

 

$

0.27

 

$

0.29

 

$

0.23

 

Return on average assets

 

 

0.98

%

 

0.90

%

 

0.98

%

 

1.13

%

 

0.92

%

Return on average equity

 

 

12.89

%

 

12.52

%

 

13.84

%

 

16.01

%

 

13.23

%

Net interest rate margin (fully tax equivalized)

 

 

3.99

%

 

4.06

%

 

4.03

%

 

4.19

%

 

4.18

%

Yield on earning assets (fully tax equivalized)

 

 

6.83

%

 

6.66

%

 

6.33

%

 

6.15

%

 

5.80

%

Cost of paying liabilities

 

 

3.55

%

 

3.27

%

 

2.94

%

 

2.53

%

 

2.08

%

Net interest spread

 

 

3.28

%

 

3.39

%

 

3.39

%

 

3.62

%

 

3.72

%

Efficiency ratio

 

 

61.01

%

 

68.28

%

 

63.45

%

 

61.78

%

 

62.44

%

Noninterest expense to average assets

 

 

3.05

%

 

3.16

%

 

2.92

%

 

2.94

%

 

2.91

%

- 3 -


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(Unaudited)

($ in thousands)

 

 

Mar 31,
2006

 

Dec 31,
2005

 

Sep 30,
2005

 

Jun 30,
2005

 

Mar 31,
2005

 

 

 

 

 

 

 

 

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

42,597

 

$

54,118

 

$

38,542

 

$

35,156

 

$

32,085

 

Federal funds sold

 

 

6,027

 

 

64,709

 

 

45,281

 

 

43,149

 

 

—  

 

Interest-bearing deposits

 

 

104

 

 

84

 

 

101

 

 

94

 

 

141

 

Debt and equity investments

 

 

110,333

 

 

135,559

 

 

96,684

 

 

89,193

 

 

92,572

 

Loans held for sale

 

 

2,447

 

 

2,761

 

 

2,273

 

 

3,996

 

 

4,180

 

Portfolio loans

 

 

1,066,084

 

 

1,002,379

 

 

976,804

 

 

958,878

 

 

972,802

 

Less allowance for loan losses

 

 

13,964

 

 

12,990

 

 

13,168

 

 

12,769

 

 

12,639

 

 

 

 

 

 

 

 

Net loans

 

 

1,052,120

 

 

989,389

 

 

963,636

 

 

946,109

 

 

960,163

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

13,624

 

 

10,276

 

 

10,098

 

 

9,556

 

 

8,413

 

Goodwill

 

 

12,004

 

 

12,042

 

 

1,938

 

 

1,938

 

 

1,938

 

Other assets

 

 

18,828

 

 

18,030

 

 

11,289

 

 

11,331

 

 

11,090

 

 

 

 

 

 

 

 

Total assets

 

$

1,258,084

 

$

1,286,968

 

$

1,169,842

 

$

1,140,522

 

$

1,110,582

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

192,997

 

$

229,325

 

$

206,724

 

$

199,136

 

$

190,667

 

Interest bearing deposits

 

 

848,633

 

 

886,919

 

 

816,241

 

 

796,548

 

 

746,126

 

 

 

 

 

 

 

 

Total deposits

 

 

1,041,630

 

 

1,116,244

 

 

1,022,965

 

 

995,684

 

 

936,793

 

Subordinated debentures

 

 

30,930

 

 

30,930

 

 

20,620

 

 

20,620

 

 

20,620

 

FHLB advances

 

 

75,068

 

 

28,584

 

 

28,749

 

 

30,564

 

 

68,879

 

Federal funds purchased

 

 

—  

 

 

—  

 

 

—  

 

 

—  

 

 

—  

 

Other borrowings

 

 

7,221

 

 

8,347

 

 

6,975

 

 

7,230

 

 

2,303

 

Other liabilities

 

 

7,729

 

 

10,258

 

 

7,036

 

 

5,984

 

 

5,263

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,162,578

 

 

1,194,363

 

 

1,086,345

 

 

1,060,082

 

 

1,033,858

 

Shareholders’ equity

 

 

95,506

 

 

92,605

 

 

83,497

 

 

80,440

 

 

76,724

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,258,084

 

$

1,286,968

 

$

1,169,842

 

$

1,140,522

 

$

1,110,582

 

 

 

 

 

 

 

 

- 4 -


ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (cont.)
(Unaudited)

($ In thousands, except per share data)

 

 

For the Quarter Ended

 

 

 

 

 

 

Mar 31,
2006

 

Dec 31,
2005

 

Sep 30,
2005

 

Jun 30,
2005

 

Mar 31,
2005

 

 

 

 

 

 

 

 

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

11,257

 

$

11,883

 

$

11,159

 

$

11,002

 

$

10,523

 

Provision for loan losses

 

 

800

 

 

70

 

 

408

 

 

226

 

 

786

 

Wealth Mangement revenue

 

 

3,319

 

 

2,370

 

 

1,472

 

 

1,471

 

 

1,212

 

Noninterest income

 

 

658

 

 

258

 

 

805

 

 

754

 

 

624

 

Noninterest expense

 

 

9,294

 

 

9,910

 

 

8,525

 

 

8,171

 

 

7,717

 

Minority interest in net income of consolidated subsidiary

 

 

(453

)

 

(113

)

 

—  

 

 

—  

 

 

—  

 

Income before income tax

 

 

4,687

 

 

4,418

 

 

4,503

 

 

4,830

 

 

3,856

 

Net income

 

 

2,998

 

 

2,829

 

 

2,878

 

 

3,141

 

 

2,447

 

Diluted earnings per share

 

$

0.28

 

$

0.26

 

$

0.27

 

$

0.29

 

$

0.23

 

Return on average equity

 

 

12.89

%

 

12.52

%

 

13.84

%

 

16.01

%

 

13.23

%

Net interest rate margin (fully tax equivalized)

 

 

3.99

%

 

4.06

%

 

4.03

%

 

4.19

%

 

4.18

%

Efficiency ratio

 

 

61.01

%

 

68.28

%

 

63.45

%

 

61.78

%

 

62.44

%

MARKET DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

9.13

 

$

8.85

 

$

8.26

 

$

8.00

 

$

7.65

 

Tangible book value per share

 

$

7.57

 

$

7.27

 

$

8.07

 

$

7.81

 

$

7.45

 

Market value per share

 

$

27.39

 

$

22.68

 

$

21.22

 

$

23.65

 

$

19.00

 

Period end common shares

 

 

10,466

 

 

10,459

 

 

10,111

 

 

10,056

 

 

10,032

 

Average basic common shares

 

 

10,465

 

 

10,357

 

 

10,083

 

 

10,046

 

 

9,922

 

Average diluted common shares

 

 

10,856

 

 

10,983

 

 

10,782

 

 

10,676

 

 

10,521

 

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

 

$

(174

)

$

248

 

$

10

 

$

96

 

$

(188

)

Nonperforming loans

 

$

1,353

 

$

1,421

 

$

1,777

 

$

2,136

 

$

3,134

 

Nonperforming loans to total loans

 

 

0.13

%

 

0.14

%

 

0.18

%

 

0.22

%

 

0.32

%

Allowance for loan losses to total loans

 

 

1.31

%

 

1.30

%

 

1.35

%

 

1.33

%

 

1.30

%

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

 

 

(0.07

)%

 

0.10

%

 

0.00

%

 

0.04

%

 

(0.08

)%

CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity to average assets

 

 

7.63

%

 

7.20

%

 

7.12

%

 

7.07

%

 

6.98

%

Tier 1 capital to risk-weighted assets

 

 

9.85

%

 

10.31

%

 

10.33

%

 

10.14

%

 

9.73

%

Total capital to risk-weighted assets

 

 

11.09

%

 

11.55

%

 

11.58

%

 

11.39

%

 

10.98

%

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio loans

 

$

1,020,866

 

$

979,182

 

$

968,802

 

$

963,570

 

$

932,910

 

Earning assets

 

 

1,165,389

 

 

1,181,273

 

 

1,114,508

 

 

1,067,366

 

 

1,034,525

 

Total assets

 

 

1,235,691

 

 

1,244,652

 

 

1,159,341

 

 

1,113,075

 

 

1,075,724

 

Deposits

 

 

1,060,035

 

 

1,080,525

 

 

1,012,070

 

 

942,466

 

 

919,910

 

Shareholders’ equity

 

 

94,338

 

 

89,641

 

 

82,495

 

 

78,701

 

 

75,037

 

LOAN PORTFOLIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

299,706

 

$

265,488

 

$

263,286

 

$

264,451

 

$

278,752

 

Commercial real estate

 

 

428,696

 

 

410,382

 

 

363,566

 

 

352,005

 

 

356,670

 

Construction real estate

 

 

155,361

 

 

138,318

 

 

128,444

 

 

134,459

 

 

132,297

 

Residential real estate

 

 

144,228

 

 

151,575

 

 

177,948

 

 

168,315

 

 

162,111

 

Consumer and other

 

 

38,093

 

 

36,616

 

 

43,559

 

 

39,649

 

 

42,972

 

 

 

 

 

 

 

 

Total loan portfolio

 

$

1,066,084

 

$

1,002,379

 

$

976,804

 

$

958,878

 

$

972,802

 

DEPOSIT PORTFOLIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing accounts

 

$

192,997

 

$

229,325

 

$

206,724

 

$

199,136

 

$

190,667

 

Interest-bearing transaction accounts

 

 

108,699

 

 

108,712

 

 

85,824

 

 

86,815

 

 

91,512

 

Money market and savings accounts

 

 

472,247

 

 

483,186

 

 

450,107

 

 

449,793

 

 

429,102

 

Certificates of deposit

 

 

267,687

 

 

295,021

 

 

280,310

 

 

259,940

 

 

225,512

 

 

 

 

 

 

 

 

Total deposit portfolio

 

$

1,041,630

 

$

1,116,244

 

$

1,022,965

 

$

995,684

 

$

936,793

 

WEALTH MANAGEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust Assets Under Management

 

$

976,425

 

$

819,608

 

$

975,704

 

$

924,817

 

$

942,486

 

Trust Assets Under Administration

 

 

1,496,020

 

 

1,388,480

 

 

1,541,597

 

 

1,476,216

 

 

1,446,874

 

- 5 -