Enterprise Financial Reports Third Quarter 2022 Results

Third Quarter Results

• Net income of $50.2 million, $1.32 per diluted common share
• Net interest income of $124.3 million, a quarterly increase of $14.7 million, or 13%
• Net interest margin of 4.10%
• Pre-provision return on average assets¹ of 1.96%
• Total loans² of $9.3 billion, a quarterly increase of $122.0 million, or 5% annualized
• Increased quarterly dividend $0.01 to $0.24 per common share for the fourth quarter

ST. LOUIS--(BUSINESS WIRE)--Jim Lally, President and Chief Executive Officer of Enterprise Financial Services Corp (Nasdaq: EFSC) (the “Company” or “EFSC”), said today upon the release of EFSC’s third quarter earnings, “Our results for the third quarter continued the momentum we established early in the year and reflects the strength of our diversified franchise. We grew loans, maintained liquidity, expanded net interest income, and reported near record earnings. We continue to be pleased with the credit quality of our loan portfolio and our solid capital position. We believe we are well positioned to finish the year with strong performance.”

Highlights

Comparisons to the prior year are impacted by the acquisition of First Choice Bancorp (“First Choice” or “FCBP”) in the third quarter of 2021.

• Earnings - Net income in the third quarter 2022 was $50.2 million, an increase of $5.1 million compared to the linked quarter and an increase of $36.3 million from the prior year quarter. Earnings per share (“EPS”) was $1.32 per diluted common share for the third quarter 2022, compared to $1.19 and $0.38 per diluted common share for the linked and prior year quarters, respectively.

• Pre-provision net revenue¹ (“PPNR”) - PPNR of $64.9 million in the third quarter 2022 increased $6.5 million and $8.8 million from the linked and prior year quarters, respectively. The increase from both the linked and prior year quarters was primarily due to an increase in operating revenue, partially offset by an increase in noninterest expense. The increase compared to the prior year quarter was also partially attributed to the First Choice acquisition.

• Net interest income and net interest margin (“NIM”) - Net interest income of $124.3 million for the third quarter 2022 increased $14.7 million and $27.0 million from the linked and prior year quarters, respectively. NIM was 4.10% for the third quarter 2022, compared to 3.55% and 3.40% for the linked and prior year quarters, respectively. Net interest income and NIM benefited from higher average loan and investment balances and expanding yields on earning assets, partially offset by higher deposit costs and a decline in average interest-earning cash.

• Noninterest income - Noninterest income of $9.5 million for the third quarter 2022 decreased $4.7 million and $8.2 million from the linked and prior year quarters, respectively. The decline from both the linked and prior year quarters was primarily due to a decrease in tax credit income and card service revenue. The increase in market interest rates in the quarter reduced tax credit income due to the impact on tax credit projects carried at fair value. Card services revenue declined due to the Durbin Amendment cap on debit card income that became effective July 1, 2022 and reduced card services revenue by approximately $1.0 million in the third quarter.

• Loans - Total loans increased $85.8 million from the linked quarter to $9.4 billion as of September 30, 2022. PPP loans declined $36.0 million to $13.2 million. Excluding PPP loans, loans grew $121.8 million, or 5%, on an annualized basis from the linked quarter. Loans excluding PPP have increased 7% on a year-to-date basis. Average loans totaled $9.2 billion for the quarter ended September 30, 2022, compared to $9.1 billion and $8.7 billion for the linked and prior year quarters, respectively.

• Asset quality - The allowance for credit losses to total loans was 1.50% at September 30, 2022, compared to 1.52% at June 30, 2022 and 1.67% at September 30, 2021. Nonperforming assets to total assets was 0.14% at September 30, 2022, compared to 0.16% and 0.35% at June 30, 2022 and September 30, 2021, respectively. A provision for credit losses of $0.7 million was recorded in the third quarter 2022 due to loan growth and changes in the macroeconomic forecasts, partially offset by a shift in the risk composition of the loan portfolio.

• Deposits - Total deposits decreased $35.0 million from the linked quarter to $11.1 billion as of September 30, 2022. Average deposits totaled $11.2 billion for the quarter ended September 30, 2022, compared to $11.5 billion and $10.3 billion for the linked and prior year quarters, respectively. At September 30, 2022, noninterest-bearing deposit accounts represented 42.0% of total deposits, and the loan to deposit ratio was 84.6%.

• Capital - Total shareholders’ equity was $1.4 billion and the tangible common equity to tangible assets ratio³ was 7.9% at September 30, 2022, compared to 7.8% at June 30, 2022. Tangible common equity was impacted in the third quarter 2022 by a $45.3 million decrease in the tax-effected fair value of the available-for-sale investment portfolio that reduced accumulated other comprehensive income. This decrease was partially offset by the undistributed earnings in the third quarter 2022. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.2% and a total risk-based capital ratio of 13.2% as of September 30, 2022. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 11.0% and 14.2%, respectively, at September 30, 2022.
  
  The Company’s Board of Directors approved a quarterly dividend of $0.24 per common share, payable on December 30, 2022 to shareholders of record as of December 15, 2022, an increase of $0.01, or 4%, compared to the third quarter 2022. The Board of Directors also declared a cash dividend of $12.50 per share of Series A Preferred Stock (or $0.3125 per depositary share) representing a 5% per annum rate for the period commencing (and including) September 15, 2022 to (but excluding) December 15, 2022. The dividend will be payable on December 15, 2022 to shareholders of record on November 30, 2022.

^1 Pre-provision return on average assets and pre-provision net revenue are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

^2Excludes PPP loans, which totaled $13.2 million at September 30, 2022.

^3Tangible common equity to tangible assets ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

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, 2022						June 30, 2022						September 30, 2021
($ 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^1, 2	$	9,230,738	$	118,642	5.10	%	$	9,109,131	$	102,328	4.51	%	$	8,666,353	$	94,465	4.32	%
Securities^2		2,202,255		14,717	2.65			2,068,119		12,944	2.51			1,594,938		9,583	2.38
Interest-earning deposits		765,258		4,190	2.17			1,401,961		2,496	0.71			1,251,988		480	0.15
Total interest-earning assets		12,198,251		137,549	4.47			12,579,211		117,768	3.76			11,513,279		104,528	3.60
Noninterest-earning assets		959,870						949,263						821,279
Total assets	$	13,158,121					$	13,528,474					$	12,334,558
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	2,200,619	$	1,707	0.31	%	$	2,329,431	$	659	0.11	%	$	2,228,466	$	459	0.08	%
Money market accounts		2,791,822		6,067	0.86			2,767,595		2,270	0.33			2,675,405		1,294	0.19
Savings		828,747		69	0.03			854,860		70	0.03			747,927		61	0.03
Certificates of deposit		554,987		844	0.60			591,091		851	0.58			604,594		927	0.61
Total interest-bearing deposits		6,376,175		8,687	0.54			6,542,977		3,850	0.24			6,256,392		2,741	0.17
Subordinated debentures		155,225		2,313	5.91			155,092		2,257	5.84			204,011		2,855	5.55
FHLB advances		25,543		103	1.60			50,000		197	1.58			89,457		211	0.94
Securities sold under agreements to repurchase		198,027		123	0.25			202,536		41	0.08			216,403		58	0.11
Other borrowings		19,984		179	3.55			21,414		111	2.08			25,699		90	1.39
Total interest-bearing liabilities		6,774,954		11,405	0.67			6,972,019		6,456	0.37			6,791,962		5,955	0.35
Noninterest-bearing liabilities:
Demand deposits		4,778,720						4,987,455						4,040,761
Other liabilities		109,943						94,733						107,739
Total liabilities		11,663,617						12,054,207						10,940,462
Shareholders' equity		1,494,504						1,474,267						1,394,096
Total liabilities and shareholders' equity	$	13,158,121					$	13,528,474					$	12,334,558
Total net interest income			$	126,144					$	111,312					$	98,573
Net interest margin					4.10	%					3.55	%					3.40	%
^1 Average balances include nonaccrual loans. Interest income includes loan fees of $3.6 million, $4.2 million, and $6.5 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.
^2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $1.9 million, $1.7 million, and $1.3 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.

Net interest income for the third quarter was $124.3 million, an increase of $14.7 million from the linked quarter and an increase of $27.0 million from the prior year period. Interest income increased during the quarter due to higher loan and investment balances combined with an increase in market interest rates. The effective federal funds rate for the third quarter 2022 was 2.20%, an increase of 144 basis points, compared to the linked quarter, and a 211 basis point increase over the prior year quarter. Excess liquidity was redeployed into the investment portfolio which, combined with higher average loan balances, benefited the earning-asset mix. The increase in interest income was partially offset by higher interest expense on the deposit portfolio due to higher costs.

The earning asset yield was 4.47% in the third quarter 2022, an increase of 71 basis points compared to the linked quarter. The average loan yield was 5.10% in the third quarter 2022, an increase of 59 basis points from the linked quarter. The average loan yield increased due to the repricing of variable-rate loans and the origination of new loans at an average rate of 5.68%. Approximately 20% of the variable-rate loan portfolio reprices on the first day of each quarter and thus, interest income in the period did not benefit from the current quarter’s rate movement. These loans will reset early in the fourth quarter.

The average investment yield was 2.65%, an increase of 14 basis points from the linked quarter. The investment yield increased due to the purchase of new investments at higher yields due to the expansion of the investment portfolio and the reinvestment of cash flows at higher interest rates. Investments purchased in the third quarter 2022 had a tax equivalent average yield of 3.68%.

The interest-bearing liability yield was 0.67% in the third quarter 2022, an increase of 30 basis points compared to the linked quarter. The average cost of interest-bearing deposits was 0.54% in the third quarter 2022, an increase of 30 basis points over the linked quarter. The increase was primarily due to higher rates paid on commercial money market accounts, which increased 53 basis points to 0.86% in the third quarter 2022. While deposit rates have increased, the pace of increase has continued to lag the increase in loan rates, resulting in a positive impact on our NIM. The total cost of deposits, including noninterest-bearing demand accounts, was 31 basis points during the third quarter 2022.

NIM, on a tax equivalent basis, was 4.10% in the third quarter 2022, an increase of 55 basis points from the linked quarter and an increase of 70 basis points from the prior year quarter, as changing interest rates had a greater impact on assets with variable interest rates than on deposit costs.

Loans

The following table presents total loans for the most recent five quarters:

	Quarter ended
($ in thousands)	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
C&I	$	1,842,510		$	1,702,081		$	1,498,151		$	1,538,155		$	1,458,078
CRE investor owned		2,106,458			1,977,806			1,982,645			1,955,087			1,935,284
CRE owner occupied		1,133,467			1,118,895			1,138,106			1,112,463			1,163,236
SBA loans*		1,269,065			1,284,279			1,249,929			1,241,449			1,199,758
Sponsor finance*		650,102			647,180			641,476			508,469			454,431
Life insurance premium financing*		717,773			688,035			636,096			593,562			572,492
Tax credits*		507,681			550,662			518,020			486,881			462,168
SBA PPP loans		13,165			49,175			134,084			271,958			438,959
Residential real estate		381,634			391,867			410,173			430,985			519,859
Construction and land development		513,452			626,577			610,830			625,526			652,227
Other		219,680			232,619			236,563			253,107			260,091
Total loans	$	9,354,987		$	9,269,176		$	9,056,073		$	9,017,642		$	9,116,583
Total loan yield		5.10	%		4.51	%		4.34	%		4.32	%		4.32	%
Variable interest rate loans to total loans		63	%		64	%		63	%		63	%		63	%
*Specialty loan category

Loans totaled $9.4 billion at September 30, 2022, increasing $85.8 million, compared to the linked quarter. PPP loans declined $36.0 million in the third quarter 2022 to $13.2 million at September 30, 2022 as a result of continued loan forgiveness by the Small Business Administration (“SBA”). Excluding PPP loans, loans grew $121.8 million, or 5% on an annualized basis, from the linked quarter. The increase was driven primarily by C&I and CRE loans, partially offset by a decline in construction loans. Average line utilization was approximately 43% for the quarter ended September 30, 2022, compared to 44% and 38.2% for the linked and prior year quarters, respectively.

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, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Nonperforming loans*	$	18,184		$	19,560		$	21,160		$	28,024		$	41,554
Other real estate		269			955			1,459			3,493			3,493
Nonperforming assets*	$	18,453		$	20,515		$	22,619		$	31,517		$	45,047
Nonperforming loans to total loans		0.19	%		0.21	%		0.23	%		0.31	%		0.46	%
Nonperforming assets to total assets		0.14	%		0.16	%		0.17	%		0.23	%		0.35	%
Allowance for credit losses to total loans		1.50	%		1.52	%		1.54	%		1.61	%		1.67	%
Net charge-offs (recoveries)	$	478		$	(175	)	$	1,521		$	3,263		$	1,850
*Guaranteed balances excluded	$	6,532		$	6,063		$	3,954		$	6,481		$	5,109

Nonperforming assets declined $2.1 million during the third quarter 2022 and $26.6 million from the prior year quarter. Net charge-offs to average loans were two basis points in the third quarter 2022, compared to one basis point of net recoveries in the linked quarter and eight basis points of net charge-offs in the prior year quarter. The Company recorded a provision for credit losses of $0.7 million in both the linked and current quarters, compared to $19.7 million in the prior year quarter. The prior year quarter included a provision for credit losses of $23.9 million to establish the initial allowance for credit losses on certain First Choice acquired loans.

The allowance for credit losses to total loans was 1.50% at September 30, 2022, a decrease of two basis points from the linked quarter. Loan growth and a worsening economic forecast increased the allowance for credit losses during the quarter. This increase was partially offset by the improvement in credit quality and a shift in the composition of the loan portfolio to categories with lower reserve levels. Loan growth in the quarter primarily was in commercial real estate and C&I loans that have a lower reserve level, while construction loans with a higher reserve level declined.

Deposits

The following table presents deposits broken out by type for the most recent five quarters:

	Quarter ended
($ in thousands)	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Noninterest-bearing demand accounts	$	4,642,539		$	4,746,478		$	4,881,043		$	4,578,436		$	4,375,713
Interest-bearing demand accounts		2,270,898			2,197,957			2,547,482			2,465,884			2,253,639
Money market and savings accounts		3,617,249			3,562,982			3,678,135			3,691,186			3,571,252
Brokered certificates of deposit		129,039			129,064			129,017			128,970			128,923
Other certificates of deposit		397,869			456,137			468,458			479,323			498,248
Total deposit portfolio	$	11,057,594		$	11,092,618		$	11,704,135		$	11,343,799		$	10,827,775
Noninterest-bearing deposits to total deposits		42.0	%		42.8	%		41.7	%		40.4	%		40.4	%

Total deposits at September 30, 2022 were $11.1 billion, a decrease of $35.0 million from June 30, 2022, and an increase of $229.8 million from September 30, 2021. Noninterest-bearing deposits declined $103.9 million from the linked quarter, primarily due to a large commercial client outflow related to a company acquisition in the Kansas City market. The total cost of deposits was 0.31% for the current quarter, compared to 0.13% for the linked quarter and 0.11% for the prior year quarter.

Noninterest Income and Expense

The following tables present a comparative summary of the major components of noninterest income, other income, and noninterest expense for the periods indicated:

	Linked quarter comparison										Prior year comparison
	Quarter ended										Quarter ended
($ in thousands)	September 30, 2022			June 30, 2022		Increase (decrease)					September 30, 2021		Increase (decrease)
Deposit service charges		4,951			4,749	$	202		4	%	$	4,520	$	431		10	%
Wealth management revenue		2,432			2,533		(101	)	(4	)%		2,573		(141	)	(5	)%
Card services revenue		2,652			3,514		(862	)	(25	)%		3,186		(534	)	(17	)%
Tax credit income (loss)		(3,625	)		1,186		(4,811	)	(406	)%		3,325		(6,950	)	(209	)%
Other income		3,044			2,212		832		38	%		4,015		(971	)	(24	)%
Total noninterest income	$	9,454		$	14,194	$	(4,740	)	(33	)%	$	17,619	$	(8,165	)	(46	)%

Total noninterest income for the third quarter 2022 was $9.5 million, a decrease of $4.7 million from the linked quarter and a decrease of $8.2 million from the prior year quarter. The decrease from the linked and prior year quarters was primarily due to decreases in tax credit income and card services revenue. Rising interest rates reduced tax credit income due to the impact on tax credit projects carried at fair value. The rise in interest rates in the third quarter 2022 increased the discount rate used in the fair value of these projects, resulting in a lower fair value. The Durbin Amendment limits the amount of interchange income the Company can earn on debit card transactions. This limitation went into effect for the Company in the third quarter 2022 and reduced card services revenue.

	Linked quarter comparison									Prior year comparison
	Quarter ended									Quarter ended
($ in thousands)	September 30, 2022		June 30, 2022		Increase (decrease)					September 30, 2021		Increase (decrease)
BOLI	$	769	$	748	$	21		3	%	$	739	$	30		4	%
Community development investments		170		193		(23	)	(12	)%		206		(36	)	(17	)%
Mortgage banking		45		43		2		5	%		509		(464	)	(91	)%
Private equity fund distribution		64		240		(176	)	(73	)%		359		(295	)	(82	)%
Servicing fees		655		165		490		297	%		887		(232	)	(26	)%
Swap fees		166		102		64		63	%		43		123		286	%
Miscellaneous income		1,175		721		454		63	%		1,272		(97	)	(8	)%
Total other income	$	3,044	$	2,212	$	832		38	%	$	4,015	$	(971	)	(24	)%

Community development and private equity distributions included in other income are not consistent sources of income and fluctuate based on distributions from the underlying funds. Servicing fee income may also fluctuate based on prepayment experience and changes to the discount rate used in the valuation of the servicing rights. Mortgage banking revenue has declined since the prior year quarter due to higher interest rates that have reduced sales volume.

	Linked quarter comparison								Prior year comparison
	Quarter ended								Quarter ended
($ in thousands)	September 30, 2022		June 30, 2022		Increase (decrease)				September 30, 2021		Increase (decrease)
Employee compensation and benefits	$	36,999	$	36,028	$	971	3	%	$	33,722	$	3,277		10	%
Occupancy		4,497		4,309		188	4	%		4,496		1		—	%
Branch closure expenses		—		—		—	—	%		3,441		(3,441	)	(100	)%
Merger-related expenses		—		—		—	—	%		14,671		(14,671	)	(100	)%
Other expense		27,347		25,087		2,260	9	%		20,555		6,792		33	%
Total noninterest expense	$	68,843	$	65,424	$	3,419	5	%	$	76,885	$	(8,042	)	(10	)%

Noninterest expense was $68.8 million for the third quarter 2022, compared to $65.4 million for the linked quarter, and $76.9 million for the prior year quarter. Employee compensation and benefits increased $1.0 million from the linked quarter due to an increase in full-time equivalent associates and higher performance-based incentive accruals. Other expense increased $2.3 million from the linked quarter primarily due to a $1.8 million increase in variable deposit costs in certain of the Company’s specialized deposit businesses that are impacted by higher interest rates. The decrease in noninterest expense of $8.0 million from the prior year quarter was primarily due to the merger costs from the First Choice acquisition and branch closure expenses recognized in the prior year quarter, offset by merit increases throughout 2021 and 2022 and an increase in variable deposit costs due to higher average balances and interest-rate trends.

For the third quarter 2022, the Company’s efficiency ratio was 51.5%, compared to 52.8% and 66.9% for the linked quarter and prior year quarter, respectively. The Company’s core efficiency ratio⁴ was 51.5% for the quarter ended September 30, 2022, compared to 52.8% for the linked quarter and 51.3% for the prior year quarter.

^4Core 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 22% for both the quarter ended September 30, 2022 and June 30, 2022, compared to 24% for the prior year quarter. The Company’s effective tax rate in the prior year quarter was higher due to certain non-deductible merger expenses.

Capital

The following table presents total equity and various EFSC capital ratios for the most recent five quarters:

	Quarter ended
Percent	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Shareholders’ equity	$	1,446,218		$	1,447,412		$	1,473,177		$	1,529,116		$	1,439,635
Total risk-based capital to risk-weighted assets		14.2	%		14.2	%		14.4	%		14.7	%		14.5	%
Tier 1 capital to risk weighted assets		12.6	%		12.5	%		12.7	%		13.0	%		12.2	%
Common equity tier 1 capital to risk-weighted assets		11.0	%		10.9	%		11.0	%		11.3	%		11.2	%
Tangible common equity to tangible assets		7.9	%		7.8	%		7.6	%		8.1	%		8.4	%
Leverage ratio		10.4	%		9.8	%		9.6	%		9.7	%		9.7	%

Total equity was $1.4 billion at September 30, 2022, a decrease of $1.2 million from the linked quarter. The decrease from the linked quarter was primarily due to a $44.7 million decline in accumulated other comprehensive income and $9.5 million in common and preferred dividends. These decreases were partially offset by current period net income of $50.2 million. The decline in accumulated other comprehensive income was due to a net fair value decline in the Company’s fixed-rate, available-for-sale investment portfolio from an increase in interest rates during the period. The Company’s tangible common book value per share was $26.62 at September 30, 2022, compared to $26.63 and $27.38 in the linked and prior year quarters, respectively.

The Company’s regulatory capital ratios continue to exceed the “well-capitalized” regulatory benchmark. 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 tangible common equity, PPNR, PPNR return on average assets (“PPNR ROAA”), financial metrics adjusted for PPP impact, core efficiency ratio, 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 tangible common equity, PPNR, PPNR ROAA, financial metrics adjusted for PPP impact, core efficiency ratio, 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 certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as merger-related expenses, facilities charges, and the gain or loss on sale of investment securities, that 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 10:00 a.m. Central Time on Tuesday, October 25, 2022. During the call, management will review the third quarter 2022 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 1-888-550-5279 (Conference ID #7004515). A recorded replay of the conference call will be available on the website approximately two hours after the call’s completion. Visit https://bit.ly/EFSC3Q2022 to register. The replay will be available for approximately two weeks following the conference call.

About Enterprise Financial Services Corp

Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.0 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 branch offices in Arizona, California, Kansas, Missouri, Nevada, and New Mexico, and SBA loan and deposit production offices throughout the country. 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.

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 are 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 First Choice acquisition and other acquisitions.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “pro forma” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in the forward-looking statements and future results could differ materially from historical performance. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions, including the First Choice 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 and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), U.S. fiscal debt, budget and tax matters, and any slowdown in global economic growth, 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 legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, changes in the method of determining LIBOR and the phase out of LIBOR, natural disasters, terrorist activities, war and geopolitical matters (including the war in Ukraine and the imposition of additional sanctions and export controls in connection therewith), or pandemics, including the COVID-19 pandemic, and their effects on economic and business environments in which we operate, including the ongoing disruption to the financial market and other economic activity caused by the continuing COVID-19 pandemic, and those factors and risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and the Company’s other filings with the SEC. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.

For any forward-looking statements made in this press release or in any documents, EFSC claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Readers are cautioned not to place undue reliance on any forward-looking statements. Except to the extent required by applicable law or regulation, EFSC disclaims any obligation to revise or publicly release any revision or update to any of the forward-looking statements included herein to reflect events or circumstances that occur after the date on which such statements were made.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited)
	Quarter ended															Nine months ended
(in thousands, except per share data)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022			Sep 30, 2021
EARNINGS SUMMARY
Net interest income	$	124,290		$	109,613		$	101,165		$	102,060		$	97,273		$	335,068		$	258,134
Provision (benefit) for credit losses		676			658			(4,068	)		(3,660	)		19,668			(2,734	)		17,045
Noninterest income		9,454			14,194			18,641			22,630			17,619			42,289			45,113
Noninterest expense		68,843			65,424			62,800			63,694			76,885			197,067			182,225
Income before income tax expense		64,225			57,725			61,074			64,656			18,339			183,024			103,977
Income tax expense		14,025			12,576			13,381			13,845			4,426			39,982			21,733
Net income		50,200			45,149			47,693			50,811			13,913			143,042			82,244
Preferred stock dividends		937			938			1,229			—			—			3,104			—
Net income available to common shareholders	$	49,263		$	44,211		$	46,464		$	50,811		$	13,913		$	139,938		$	82,244
Diluted earnings per common share	$	1.32		$	1.19		$	1.23		$	1.33		$	0.38		$	3.73		$	2.48
Return on average assets		1.51	%		1.34	%		1.42	%		1.52	%		0.45	%		1.42	%		1.01	%
Return on average common equity		13.74	%		12.65	%		12.87	%		13.81	%		3.96	%		13.09	%		9.14	%
Return on average tangible common equity^1		18.82	%		17.44	%		17.49	%		18.81	%		5.37	%		17.92	%		12.31	%
Net interest margin (tax equivalent)		4.10	%		3.55	%		3.28	%		3.32	%		3.40	%		3.64	%		3.45	%
Efficiency ratio		51.47	%		52.84	%		52.42	%		51.08	%		66.92	%		52.22	%		60.09	%
Core efficiency ratio^1		51.47	%		52.81	%		52.43	%		49.22	%		51.30	%		52.21	%		52.59	%
Loans	$	9,354,987		$	9,269,176		$	9,056,073		$	9,017,642		$	9,116,583
Average loans	$	9,230,738		$	9,109,131		$	9,005,875		$	9,030,982		$	8,666,353		$	9,116,072		$	7,727,265
Assets	$	12,994,787		$	13,084,506		$	13,706,769		$	13,537,358		$	12,888,016
Average assets	$	13,158,121		$	13,528,474		$	13,614,003		$	13,267,193		$	12,334,558		$	13,431,863		$	10,860,756
Deposits	$	11,057,594		$	11,092,618		$	11,704,135		$	11,343,799		$	10,827,775
Average deposits	$	11,154,895		$	11,530,432		$	11,494,212		$	11,167,003		$	10,297,153		$	11,391,937		$	9,035,902
Period end common shares outstanding		37,223			37,206			37,516			37,820			38,372
Dividends per common share	$	0.23		$	0.22		$	0.21		$	0.20		$	0.19		$	0.66		$	0.55
Tangible book value per common share	$	26.62		$	26.63		$	27.06		$	28.28		$	27.38
Tangible common equity to tangible assets^1		7.86	%		7.80	%		7.62	%		8.13	%		8.40	%
Total risk-based capital to risk-weighted assets		14.2	%		14.2	%		14.4	%		14.7	%		14.5	%
^1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended													Nine months ended
($ in thousands, except per share data)	Sep 30, 2022			Jun 30, 2022		Mar 31, 2022			Dec 31, 2021			Sep 30, 2021		Sep 30, 2022			Sep 30, 2021
INCOME STATEMENTS
NET INTEREST INCOME
Interest income	$	135,695		$	116,069	$	106,581		$	107,641		$	103,228	$	358,345		$	275,589
Interest expense		11,405			6,456		5,416			5,581			5,955		23,277			17,455
Net interest income		124,290			109,613		101,165			102,060			97,273		335,068			258,134
Provision (benefit) for credit losses		676			658		(4,068	)		(3,660	)		19,668		(2,734	)		17,045
Net interest income after provision (benefit) for credit losses		123,614			108,955		105,233			105,720			77,605		337,802			241,089
NONINTEREST INCOME
Deposit service charges		4,951			4,749		4,163			3,962			4,520		13,863			11,466
Wealth management revenue		2,432			2,533		2,622			2,687			2,573		7,587			7,572
Card services revenue		2,652			3,514		3,040			3,223			3,186		9,206			8,657
Tax credit income (loss)		(3,625	)		1,186		2,608			4,374			3,325		169			3,654
Other income		3,044			2,212		6,208			8,384			4,015		11,464			13,764
Total noninterest income		9,454			14,194		18,641			22,630			17,619		42,289			45,113
NONINTEREST EXPENSE
Employee compensation and benefits		36,999			36,028		35,827			33,488			33,722		108,854			91,416
Occupancy		4,497			4,309		4,586			4,510			4,496		13,392			11,776
Branch closure expenses		—			—		—			—			3,441		—			3,441
Merger-related expenses		—			—		—			2,320			14,671		—			19,762
Other expense		27,347			25,087		22,387			23,376			20,555		74,821			55,830
Total noninterest expense		68,843			65,424		62,800			63,694			76,885		197,067			182,225
Income before income tax expense		64,225			57,725		61,074			64,656			18,339		183,024			103,977
Income tax expense		14,025			12,576		13,381			13,845			4,426		39,982			21,733
Net income	$	50,200		$	45,149	$	47,693		$	50,811		$	13,913	$	143,042		$	82,244
Preferred stock dividends		937			938		1,229			—			—		3,104			—
Net income available to common shareholders	$	49,263		$	44,211	$	46,464		$	50,811		$	13,913	$	139,938		$	82,244
Basic earnings per common share	$	1.32		$	1.19	$	1.23		$	1.33		$	0.38	$	3.74		$	2.48
Diluted earnings per common share	$	1.32		$	1.19	$	1.23		$	1.33		$	0.38	$	3.73		$	2.48

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
BALANCE SHEETS
ASSETS
Cash and due from banks	$	264,078		$	271,763		$	252,706		$	209,177		$	179,826
Interest-earning deposits		489,825			680,343			1,735,708			1,819,508			1,216,470
Debt and equity investments		2,171,942			2,172,318			1,993,927			1,855,583			1,717,442
Loans held for sale		785			4,615			4,270			6,389			5,068
Loans		9,354,987			9,269,176			9,056,073			9,017,642			9,116,583
Allowance for credit losses		(140,572	)		(140,546	)		(139,212	)		(145,041	)		(152,096	)
Total loans, net		9,214,415			9,128,630			8,916,861			8,872,601			8,964,487
Fixed assets, net		43,882			46,028			46,900			47,915			48,697
Goodwill		365,164			365,164			365,164			365,164			365,415
Intangible assets, net		18,217			19,528			20,855			22,286			23,777
Other assets		426,479			396,117			370,378			338,735			366,834
Total assets	$	12,994,787		$	13,084,506		$	13,706,769		$	13,537,358		$	12,888,016
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	4,642,539		$	4,746,478		$	4,881,043		$	4,578,436		$	4,375,713
Interest-bearing deposits		6,415,055			6,346,140			6,823,092			6,765,363			6,452,062
Total deposits		11,057,594			11,092,618			11,704,135			11,343,799			10,827,775
Subordinated debentures		155,298			155,164			155,031			154,899			204,103
FHLB advances		—			50,000			50,000			50,000			50,000
Other borrowings		197,422			226,695			228,846			353,863			243,770
Other liabilities		138,255			112,617			95,580			105,681			122,733
Total liabilities		11,548,569			11,637,094			12,233,592			12,008,242			11,448,381
Shareholders’ equity:
Preferred stock		71,988			71,988			71,988			71,988			—
Common stock		372			372			395			398			404
Treasury stock		—			—			(73,528	)		(73,528	)		(73,528	)
Additional paid-in capital		979,543			976,684			1,010,446			1,018,799			1,031,146
Retained earnings		547,506			506,849			523,136			492,682			461,711
Accumulated other comprehensive income (loss)		(153,191	)		(108,481	)		(59,260	)		18,777			19,902
Total shareholders’ equity		1,446,218			1,447,412			1,473,177			1,529,116			1,439,635
Total liabilities and shareholders’ equity	$	12,994,787		$	13,084,506		$	13,706,769		$	13,537,358		$	12,888,016

	Nine months ended
	September 30, 2022						September 30, 2021
($ in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Assets
Interest-earning assets:
Loans^1, 2	$	9,116,072	$	317,271	4.65	%	$	7,727,264	$	250,699	4.34	%
Securities^2		2,065,800		38,631	2.50			1,505,592		27,627	2.45
Interest-earning deposits		1,312,442		7,502	0.76			914,954		906	0.13
Total interest-earning assets		12,494,314		363,404	3.89			10,147,810		279,232	3.68
Noninterest-earning assets		937,549						712,946
Total assets	$	13,431,863					$	10,860,756
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	2,344,007	$	2,902	0.17	%	$	2,035,029	$	1,123	0.07	%
Money market accounts		2,810,278		9,797	0.47			2,458,146		3,257	0.18
Savings		833,721		205	0.03			707,269		161	0.03
Certificates of deposit		584,213		2,492	0.57			555,045		3,329	0.80
Total interest-bearing deposits		6,572,219		15,396	0.31			5,755,489		7,870	0.18
Subordinated debentures		155,093		6,790	5.85			203,853		8,521	5.59
FHLB advances		41,758		495	1.58			63,297		603	1.27
Securities sold under agreements to repurchase		220,703		224	0.14			218,942		176	0.11
Other borrowings		21,402		372	2.32			27,154		285	1.40
Total interest-bearing liabilities		7,011,175		23,277	0.44			6,268,735		17,455	0.37
Noninterest-bearing liabilities:
Demand deposits		4,819,718						3,280,414
Other liabilities		99,458						108,001
Total liabilities		11,930,351						9,657,150
Shareholders' equity		1,501,512						1,203,606
Total liabilities and shareholders' equity	$	13,431,863					$	10,860,756
Total net interest income			$	340,127					$	261,777
Net interest margin					3.64	%					3.45	%
^1 Average balances include nonaccrual loans. Interest income includes loan fees of $13.0 million and $22.1 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.
^2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $5.1 million and $3.6 million for the nine months ended September 30, 2022 and 2021, respectively.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
LOAN PORTFOLIO
Commercial and industrial	$	3,709,893		$	3,596,701		$	3,398,723		$	3,392,375		$	3,379,171
Commercial real estate		4,438,647			4,294,375			4,278,138			4,176,928			4,179,712
Construction real estate		583,649			724,163			702,630			734,073			747,758
Residential real estate		397,450			413,727			432,639			454,052			542,690
Other		225,348			240,210			243,943			260,214			267,252
Total loans	$	9,354,987		$	9,269,176		$	9,056,073		$	9,017,642		$	9,116,583
DEPOSIT PORTFOLIO
Noninterest-bearing demand accounts	$	4,642,539		$	4,746,478		$	4,881,043		$	4,578,436		$	4,375,713
Interest-bearing demand accounts		2,270,898			2,197,957			2,547,482			2,465,884			2,253,639
Money market and savings accounts		3,617,249			3,562,982			3,678,135			3,691,186			3,571,252
Brokered certificates of deposit		129,039			129,064			129,017			128,970			128,923
Other certificates of deposit		397,869			456,137			468,458			479,323			498,248
Total deposits	$	11,057,594		$	11,092,618		$	11,704,135		$	11,343,799		$	10,827,775
AVERAGE BALANCES
Loans	$	9,230,738		$	9,109,131		$	9,005,875		$	9,030,982		$	8,666,353
Securities		2,202,255			2,068,119			1,923,969			1,753,159			1,594,938
Interest-earning assets		12,198,251			12,579,211			12,711,116			12,373,149			11,513,279
Assets		13,158,121			13,528,474			13,614,003			13,267,193			12,334,558
Deposits		11,154,895			11,530,432			11,494,212			11,167,003			10,297,153
Shareholders’ equity		1,494,504			1,474,267			1,536,221			1,495,396			1,394,096
Tangible common equity^1		1,038,495			1,016,940			1,077,529			1,071,902			1,028,001
YIELDS (tax equivalent)
Loans		5.10	%		4.51	%		4.34	%		4.32	%		4.32	%
Securities		2.65			2.51			2.31			2.30			2.38
Interest-earning assets		4.47			3.76			3.45			3.50			3.60
Interest-bearing deposits		0.54			0.24			0.17			0.17			0.17
Deposits		0.31			0.13			0.10			0.10			0.11
Subordinated debentures		5.91			5.84			5.81			5.64			5.55
FHLB advances and other borrowed funds		0.66			0.51			0.41			0.43			0.43
Interest-bearing liabilities		0.67			0.37			0.30			0.31			0.35
Net interest margin		4.10			3.55			3.28			3.32			3.40
^1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

PPP details:

	Quarter ended
($ in thousands, except per share data)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
PPP loans outstanding, net of deferred fees	$	13,165		$	49,175		$	134,084		$	271,958		$	438,959
Average PPP loans outstanding, net		26,113			89,152			194,382			365,295			489,104
PPP interest and fee income recognized		471			1,557			2,858			4,864			6,048
PPP deferred fees remaining		119			524			1,851			4,215			7,428
PPP average yield		7.16	%		7.01	%		5.96	%		5.28	%		4.91	%

	Quarter ended
	Sep 30, 2022						Jun 30, 2022						Mar 31, 2022						Dec 31, 2021						Sep 30, 2021
Financial Metrics:	As Reported			Excluding PPP*			As Reported			Excluding PPP*			As Reported			Excluding PPP*			As Reported			Excluding PPP*			As Reported			Excluding PPP*
EPS	$	1.32		$	1.31		$	1.19		$	1.15		$	1.23		$	1.17		$	1.33		$	1.23		$	0.38		$	0.25
ROAA		1.51	%		1.51	%		1.34	%		1.31	%		1.42	%		1.38	%		1.52	%		1.45	%		0.45	%		0.31	%
PPNR ROAA*		1.96	%		1.95	%		1.73	%		1.70	%		1.70	%		1.64	%		1.89	%		1.80	%		1.81	%		1.68	%
Tangible common equity/tangible assets*		7.86	%		7.86	%		7.80	%		7.83	%		7.62	%		7.70	%		8.13	%		8.31	%		8.40	%		8.71	%
Leverage ratio		10.4	%		10.4	%		9.8	%		9.8	%		9.6	%		9.7	%		9.7	%		10.0	%		9.7	%		10.2	%
NIM		4.10	%		4.10	%		3.55	%		3.52	%		3.28	%		3.23	%		3.32	%		3.26	%		3.40	%		3.33	%
Allowance for credit losses/loans		1.50	%		1.67	%		1.52	%		1.69	%		1.54	%		1.73	%		1.61	%		1.84	%		1.67	%		1.94	%
* 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. The ratio of allowance for credit losses to loans excludes all guaranteed loans, including PPP loans.

ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
(in thousands, except per share data)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
ASSET QUALITY
Net charge-offs (recoveries)	$	478		$	(175	)	$	1,521		$	3,263		$	1,850
Nonperforming loans		18,184			19,560			21,160			28,024			41,554
Classified assets		98,078			96,801			93,199			100,797			104,220
Nonperforming loans to total loans		0.19	%		0.21	%		0.23	%		0.31	%		0.46	%
Nonperforming assets to total assets		0.14	%		0.16	%		0.17	%		0.23	%		0.35	%
Allowance for credit losses to total loans		1.50	%		1.52	%		1.54	%		1.61	%		1.67	%
Allowance for credit losses to nonperforming loans		773.1	%		718.5	%		657.9	%		517.6	%		366.0	%
Net charge-offs (recoveries) to average loans -annualized		0.02	%		(0.01	)%		0.07	%		0.14	%		0.08	%
WEALTH MANAGEMENT
Trust assets under management	$	1,691,230		$	1,757,228		$	1,943,428		$	2,083,543		$	2,017,178
Trust assets under administration		2,138,636			2,184,019			2,400,679			2,556,266			2,486,152
MARKET DATA
Book value per common share	$	36.92		$	36.97		$	37.35		$	38.53		$	37.52
Tangible book value per common share^1	$	26.62		$	26.63		$	27.06		$	28.28		$	27.38
Market value per share	$	44.04		$	41.50		$	47.31		$	47.09		$	45.28
Period end common shares outstanding		37,223			37,206			37,516			37,820			38,372
Average basic common shares		37,241			37,243			37,788			38,228			36,878
Average diluted common shares		37,348			37,282			37,858			38,311			36,946
CAPITAL
Total risk-based capital to risk-weighted assets		14.2	%		14.2	%		14.4	%		14.7	%		14.5	%
Tier 1 capital to risk-weighted assets		12.6	%		12.5	%		12.7	%		13.0	%		12.2	%
Common equity tier 1 capital to risk-weighted assets		11.0	%		10.9	%		11.0	%		11.3	%		11.2	%
Tangible common equity to tangible assets^1		7.9	%		7.8	%		7.6	%		8.1	%		8.4	%
^1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.

ENTERPRISE FINANCIAL SERVICES CORP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
	Quarter ended															Nine months ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022			Sep 30, 2021
CORE PERFORMANCE MEASURES
Net interest income	$	124,290		$	109,613		$	101,165		$	102,060		$	97,273		$	335,068		$	258,134
Noninterest income		9,454			14,194			18,641			22,630			17,619			42,289			45,113
Less gain (loss) on sale of other real estate owned		(22	)		(90	)		19			—			335			(93	)		884
Total core revenue		133,766			123,897			119,787			124,690			114,557			377,450			302,363
Noninterest expense		68,843			65,424			62,800			63,694			76,885			197,067			182,225
Less branch closure expenses		—			—			—			—			3,441			—			3,441
Less merger-related expenses		—			—			—			2,320			14,671			—			19,762
Core noninterest expense		68,843			65,424			62,800			61,374			58,773			197,067			159,022
Core efficiency ratio		51.47	%		52.81	%		52.43	%		49.22	%		51.30	%		52.21	%		52.59	%

	Quarter ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
SHAREHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS
Shareholders’ equity	$	1,446,218		$	1,447,412		$	1,473,177		$	1,529,116		$	1,439,635
Less preferred stock		71,988			71,988			71,988			71,988			—
Less goodwill		365,164			365,164			365,164			365,164			365,415
Less intangible assets		18,217			19,528			20,855			22,286			23,777
Tangible common equity	$	990,849		$	990,732		$	1,015,170		$	1,069,678		$	1,050,443
Total assets	$	12,994,787		$	13,084,506		$	13,706,769		$	13,537,358		$	12,888,016
Less goodwill		365,164			365,164			365,164			365,164			365,415
Less intangible assets		18,217			19,528			20,855			22,286			23,777
Tangible assets	$	12,611,406		$	12,699,814		$	13,320,750		$	13,149,908		$	12,498,824
Tangible common equity to tangible assets		7.86	%		7.80	%		7.62	%		8.13	%		8.40	%

	Quarter Ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Sep 30, 2021
AVERAGE SHAREHOLDERS’ EQUITY AND AVERAGE TANGIBLE COMMON EQUITY
Average shareholder’s equity	$	1,494,504		$	1,474,267		$	1,394,096
Less average preferred stock		71,988			71,988			—
Less average goodwill		365,164			365,164			342,622
Less average intangible assets		18,857			20,175			23,473
Average tangible common equity	$	1,038,495		$	1,016,940		$	1,028,001
Net income available to common shareholders	$	49,263		$	44,211		$	13,913
Return on average tangible common equity		18.82	%		17.44	%		5.37	%

	Quarter ended															Nine months ended
($ in thousands)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022			Sep 30, 2021
CALCULATION OF PRE-PROVISION NET REVENUE
Net interest income	$	124,290		$	109,613		$	101,165		$	102,060		$	97,273		$	335,068		$	258,134
Noninterest income		9,454			14,194			18,641			22,630			17,619			42,289			45,113
Less noninterest expense		68,843			65,424			62,800			63,694			76,885			197,067			182,225
Branch closure expenses		—			—			—			—			3,441			—			3,441
Merger-related expenses		—			—			—			2,320			14,671			—			19,762
PPNR	$	64,901		$	58,383		$	57,006		$	63,316		$	56,119		$	180,290		$	144,225
Average assets	$	13,158,121		$	13,528,474		$	13,614,003		$	13,267,193		$	12,334,558		$	13,431,863		$	10,860,756
ROAA - GAAP net income		1.51	%		1.34	%		1.42	%		1.52	%		0.45	%		1.42	%		1.01	%
PPNR ROAA - PPNR		1.96	%		1.73	%		1.70	%		1.89	%		1.81	%		1.79	%		1.78	%

	Quarter Ended
($ in thousands, except per share data)	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
IMPACT OF PAYCHECK PROTECTION PROGRAM
Net income - GAAP	$	50,200		$	45,149		$	47,693		$	50,811		$	13,913
PPP interest and fee income		(471	)		(1,557	)		(2,858	)		(4,864	)		(6,048	)
Related tax effect		119			392			720			1,226			1,506
Adjusted net income - Non-GAAP	$	49,848		$	43,984		$	45,555		$	47,173		$	9,371
Preferred stock dividends		937			938			1,229			—			—
Adjusted net income available to common shareholders- Non-GAAP	$	48,911		$	43,046		$	44,326		$	47,173		$	9,371
Average diluted common shares		37,348			37,282			37,858			38,311			36,946
EPS - GAAP net income available to common shareholders	$	1.32		$	1.19		$	1.23		$	1.33		$	0.38
EPS - Adjusted net income available to common shareholders	$	1.31		$	1.15		$	1.17		$	1.23		$	0.25
Average Assets - GAAP	$	13,158,121		$	13,528,474		$	13,614,003		$	13,267,193		$	12,334,558
Average PPP loans, net		(26,113	)		(89,152	)		(194,382	)		(365,295	)		(489,104	)
Adjusted average assets - Non-GAAP	$	13,132,008		$	13,439,322		$	13,419,621		$	12,901,898		$	11,845,454
ROAA - GAAP net income		1.51	%		1.34	%		1.42	%		1.52	%		0.45	%
ROAA - Adjusted net income, adjusted average assets		1.51	%		1.31	%		1.38	%		1.45	%		0.31	%
PPNR - Non-GAAP (see reconciliation above)	$	64,901		$	58,383		$	57,006		$	63,316		$	56,119
PPP interest and fee income		(471	)		(1,557	)		(2,858	)		(4,864	)		(6,048	)
Adjusted PPNR - Non-GAAP	$	64,430		$	56,826		$	54,148		$	58,452		$	50,071
PPNR ROAA - PPNR		1.96	%		1.73	%		1.70	%		1.89	%		1.81	%
PPNR ROAA - adjusted PPNR, adjusted average assets		1.95	%		1.70	%		1.64	%		1.80	%		1.68	%
Tangible assets - Non-GAAP (see reconciliation above)	$	12,611,406		$	12,699,814		$	13,320,750		$	13,149,908		$	12,498,824
PPP loans outstanding, net		(13,165	)		(49,175	)		(134,084	)		(271,958	)		(438,959	)
Adjusted tangible assets - Non-GAAP	$	12,598,241		$	12,650,639		$	13,186,666		$	12,877,950		$	12,059,865
Tangible common equity Non-GAAP (see reconciliation above)	$	990,849		$	990,732		$	1,015,170		$	1,069,678		$	1,050,443
Tangible common equity to tangible assets		7.86	%		7.80	%		7.62	%		8.13	%		8.40	%
Tangible common equity to tangible assets - adjusted tangible assets		7.86	%		7.83	%		7.70	%		8.31	%		8.71	%
Average assets for leverage ratio	$	12,918,632		$	13,265,790		$	13,273,520		$	12,915,944		$	11,972,171
Average PPP loans, net		(26,113	)		(89,152	)		(194,382	)		(365,295	)		(489,104	)
Adjusted average assets for leverage ratio - Non-GAAP	$	12,892,519		$	13,176,638		$	13,079,138		$	12,550,649		$	11,483,067
Tier 1 capital	$	1,340,252		$	1,295,791		$	1,271,342		$	1,257,462		$	1,166,529
Leverage ratio		10.4	%		9.8	%		9.6	%		9.7	%		9.7	%
Leverage ratio - adjusted average assets for leverage ratio		10.4	%		9.8	%		9.7	%		10.0	%		10.2	%
Net interest income - tax equivalent	$	126,144		$	111,312		$	102,671		$	103,567		$	98,573
PPP interest and fee income		(471	)		(1,557	)		(2,858	)		(4,864	)		(6,048	)
Adjusted net interest income - tax equivalent	$	125,673		$	109,755		$	99,813		$	98,703		$	92,525
Average earning assets - GAAP	$	12,198,251		$	12,579,211		$	12,711,116		$	12,373,149		$	11,513,279
Average PPP loans, net		(26,113	)		(89,152	)		(194,382	)		(365,295	)		(489,104	)
Adjusted average earning assets - Non-GAAP	$	12,172,138		$	12,490,059		$	12,516,734		$	12,007,854		$	11,024,175
Net interest margin - tax equivalent		4.10	%		3.55	%		3.28	%		3.32	%		3.40	%
Net interest margin - tax equivalent - adjusted net interest income, adjusted average earning assets		4.10	%		3.52	%		3.23	%		3.26	%		3.33	%
Loans - GAAP	$	9,354,987		$	9,269,176		$	9,056,073		$	9,017,642		$	9,116,583
PPP and other guaranteed loans, net		(924,605	)		(967,396	)		(1,023,509	)		(1,151,895	)		(1,277,452	)
Adjusted loans - Non-GAAP	$	8,430,382		$	8,301,780		$	8,032,564		$	7,865,747		$	7,839,131
Allowance for credit losses	$	140,572		$	140,546		$	139,212		$	145,041		$	152,096
Allowance for credit losses/loans - GAAP		1.50	%		1.52	%		1.54	%		1.61	%		1.67	%
Allowance for credit losses/loans - adjusted loans		1.67	%		1.69	%		1.73	%		1.84	%		1.94	%