Enterprise Financial Reports Second Quarter 2023 Results

Second Quarter Results

• Net income of $49.1 million, $1.29 per diluted common share
• Net interest margin of 4.49%, quarterly decrease of 22 basis points
• Net interest income of $140.7 million, quarterly increase of $1.2 million
• Total loans of $10.5 billion, quarterly increase of $500.7 million
• Total deposits of $11.6 billion, quarterly increase of $465.2 million
• Tangible common equity to tangible assets¹ of 8.65%

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 second quarter earnings, “I am pleased with our strong financial performance in the second quarter and our associates continued commitment to our customers and communities. We had significant loan growth across our geographic regions and business lines, building on the momentum from the first quarter. This increase in average loans has helped accelerate interest income to mitigate the effect of rising deposit interest expense. We remain focused on executing our strategic initiatives, including a focus on customer engagement and onboarding to support deposit growth and operational efficiencies.”

Highlights

• Earnings - Net income in the second quarter 2023 was $49.1 million, a decrease of $6.6 million, compared to the linked quarter and an increase of $4.0 million from the prior year quarter. Earnings per share (“EPS”) was $1.29 per diluted common share for the second quarter 2023, compared to $1.46 and $1.19 per diluted common share for the linked and prior year quarters, respectively.

• Pre-provision net revenue² (“PPNR”) - PPNR of $68.9 million in the second quarter 2023 decreased $6.0 million from the linked quarter and increased $10.5 million from the prior year quarter.

• Net interest income and net interest margin (“NIM”) - Net interest income of $140.7 million for the second quarter 2023 increased $1.2 million and $31.1 million from the linked and prior year quarters, respectively. NIM was 4.49% for the second quarter 2023, compared to 4.71% and 3.55% for the linked and prior year quarters, respectively. Net interest income and NIM benefited from higher average loan and investment balances combined with expanding yields on earning assets. NIM decreased 22 basis points from the linked quarter, primarily due to the increase in deposit interest expense.

• Noninterest income - Noninterest income of $14.3 million for the second quarter 2023 decreased $2.6 million and increased $0.1 million from the linked quarter and the prior year quarter, respectively. The decline from the linked quarter was primarily due to decreases in tax credit income and in gains on the sale of investment securities and SBA loans.

• Noninterest expense - Noninterest expense of $86.0 million for the second quarter 2023 increased $5.0 million and $20.5 million from the linked quarter and the prior year quarter, respectively. The increase from both the linked and prior year quarters was primarily due to an increase in variable deposit costs and operational losses. An increase in employee compensation also contributed to the increase from the prior year quarter.

• Loans - Loans totaled $10.5 billion at June 30, 2023, an increase of $500.7 million, or 20.1% on an annualized basis, from the linked quarter and an increase of $1.2 billion from the prior year period. Average loans totaled $10.3 billion for the quarter ended June 30, 2023, compared to $9.8 billion and $9.1 billion for the linked and prior year quarters, respectively.

• Asset quality - The allowance for credit losses to total loans was 1.34% at June 30, 2023, compared to 1.38% at March 31, 2023 and 1.52% at June 30, 2022. Nonperforming assets to total assets was 0.12% at June 30, 2023, compared to 0.09% and 0.16% at March 31, 2023 and June 30, 2022, respectively. The provision for credit losses of $6.3 million recorded in the second quarter 2023 was primarily related to loan growth, net charge-offs and a change in economic factors.

• Deposits - Total deposits increased $465.2 million from the linked quarter to $11.6 billion as of June 30, 2023. Total estimated insured deposits, which includes collateralized deposits and accounts that qualify for pass through insurance, totaled $8.3 billion at June 30, 2023. Average deposits totaled $11.4 billion for the quarter ended June 30, 2023, compared to $10.9 billion and $11.5 billion for the linked and prior year quarters, respectively. At June 30, 2023, noninterest-bearing deposit accounts totaled $3.9 billion, or 33.4% of total deposits, and the loan to deposit ratio was 90.5%.

• Liquidity - The Company’s total available on- and off-balance-sheet liquidity was approximately $4.5 billion at June 30, 2023. On-balance-sheet liquidity consisted of cash of $322.0 million and unpledged investment securities with a fair value of $647.3 million at June 30, 2023. Off-balance-sheet liquidity consisted of $764.1 million available through the Federal Home Loan Bank, $2.6 billion through the Federal Reserve and $140.0 million through correspondent bank lines. The Company also has an unused $25.0 million revolving line of credit and maintains a shelf registration allowing for the issuance of various forms of equity and debt securities.

• Capital - Total shareholders’ equity was $1.6 billion and the tangible common equity to tangible assets ratio³ was 8.65% at June 30, 2023, compared to 8.81% at March 31, 2023. The tangible common equity to tangible assets ratio, adjusted for unrealized losses on held-to-maturity securities,³ was 8.25% at June 30, 2023 and 8.43% at March 31, 2023. Enterprise Bank & Trust remains “well-capitalized,” with a common equity tier 1 ratio of 12.0% and a total risk-based capital ratio of 13.0% as of June 30, 2023. The Company’s common equity tier 1 ratio and total risk-based capital ratio was 11.1% and 14.1%, respectively, at June 30, 2023.

The Company’s Board of Directors approved a quarterly dividend of $0.25 per common share, payable on September 29, 2023 to shareholders of record as of September 15, 2023. 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) June 15, 2023 to (but excluding) September 15, 2023. The dividend will be payable on September 15, 2023 to holders of record of Series A Preferred Stock as of August 31, 2023.

Net Interest Income and NIM
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 average interest rates earned and paid, all on a tax-equivalent basis.

	Quarter ended
	June 30, 2023						March 31, 2023						June 30, 2022
($ 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	$	10,284,873	$	170,314	6.64	%	$	9,795,045	$	152,762	6.33	%	$	9,109,131	$	102,328	4.51	%
Securities^2		2,297,995		17,550	3.06			2,288,451		17,117	3.03			2,068,119		12,944	2.51
Interest-earning deposits		173,785		2,095	4.84			106,254		1,195	4.56			1,401,961		2,496	0.71
Total interest-earning assets		12,756,653		189,959	5.97			12,189,750		171,074	5.69			12,579,211		117,768	3.76
Noninterest-earning assets		915,332						941,445						949,263
Total assets	$	13,671,985					$	13,131,195					$	13,528,474
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	2,509,805	$	10,120	1.62	%	$	2,201,910	$	5,907	1.09	%	$	2,329,431	$	659	0.11	%
Money market accounts		2,920,079		20,499	2.82			2,826,836		15,471	2.22			2,767,595		2,270	0.33
Savings accounts		686,973		227	0.13			732,256		230	0.13			854,860		70	0.03
Certificates of deposit		1,219,500		10,526	3.46			670,521		3,053	1.85			591,091		851	0.58
Total interest-bearing deposits		7,336,357		41,372	2.26			6,431,523		24,661	1.56			6,542,977		3,850	0.24
Subordinated debentures and notes		155,632		2,431	6.27			155,497		2,409	6.28			155,092		2,257	5.84
FHLB advances		98,912		1,279	5.19			110,928		1,332	4.87			50,000		197	1.58
Securities sold under agreements to repurchase		162,606		704	1.74			215,604		749	1.41			202,537		41	0.08
Other borrowings		133,770		1,419	4.25			53,885		353	2.66			21,413		111	2.08
Total interest-bearing liabilities		7,887,277		47,205	2.40			6,967,437		29,504	1.72			6,972,019		6,456	0.37
Noninterest-bearing liabilities:
Demand deposits		4,051,456						4,481,966						4,987,455
Other liabilities		111,915						113,341						94,733
Total liabilities		12,050,648						11,562,744						12,054,207
Shareholders' equity		1,621,337						1,568,451						1,474,267
Total liabilities and shareholders' equity	$	13,671,985					$	13,131,195					$	13,528,474
Total net interest income			$	142,754					$	141,570					$	111,312
Net interest margin					4.49	%					4.71	%					3.55	%
^1 Average balances include nonaccrual loans. Interest income includes loan fees of $3.7 million, $3.7 million, and $4.2 million for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.
^2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $2.1 million, $2.0 million, and $1.7 million for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.

Net interest income (on a tax equivalent basis) for the second quarter 2023 was $142.8 million, an increase of $1.2 million, compared to the linked quarter and an increase of $31.4 million from the prior year period. The increase from the linked and prior year quarters reflects the benefit of higher market interest rates on the Company’s asset sensitive balance sheet combined with organic growth.

Interest income increased $18.9 million during the second quarter 2023 primarily due to an increase of $17.6 million in loan interest income from continued loan growth and higher loan yields. Interest on loans benefited from a 31 basis point increase in yield and a $489.8 million increase in average loans, compared to the linked quarter. The average interest rate of new loan originations in the second quarter 2023 was 7.60%.

Interest expense increased $17.7 million in the second quarter 2023 primarily due to a $16.7 million increase in deposit interest expense and a $1.0 million increase in interest expense on other borrowings. The increase in deposit interest expense reflects a shift in the deposit mix from demand deposits and interest-bearing demand deposits to money market accounts and certificates of deposit, as well as higher rates paid on deposits. The average cost of interest-bearing deposits was 2.26%, an increase of 70 basis points over the linked quarter. The increase was primarily due to higher rates paid on certificates of deposit and commercial money market accounts, which increased 161 basis points and 60 basis points, respectively, in addition to a higher average certificate of deposit balance. The total cost of deposits, including noninterest-bearing demand accounts, was 1.46% during the second quarter 2023, compared to 0.92% in the linked quarter. The increase in interest expense on other borrowings was primarily from higher average borrowings to increase on-balance-sheet liquidity primarily due to the uncertain impact of the federal government debt ceiling debate.

NIM, on a tax equivalent basis, was 4.49% in the second quarter 2023, a decrease of 22 basis points from the linked quarter and an increase of 94 basis points from the prior year quarter. For the month of June 2023, the loan portfolio yield was 6.74% and the cost of total deposits was 1.60%.

Investments

	Quarter ended
	June 30, 2023					March 31, 2023					June 30, 2022
($ in thousands)	Carrying Value		Net Unrealized Loss			Carrying Value		Net Unrealized Loss			Carrying Value		Net Unrealized Loss
Available-for-sale (AFS)	$	1,550,375	$	(179,857	)	$	1,555,109	$	(161,572	)	$	1,493,277	$	(165,135	)
Held-to-maturity (HTM)		723,959		(71,673	)		720,694		(65,013	)		617,767		(80,899	)
Total	$	2,274,334	$	(251,530	)	$	2,275,803	$	(226,585	)	$	2,111,044	$	(246,034	)

Investment securities totaled $2.3 billion at June 30, 2023, a decrease of $1.5 million from the linked quarter. The decrease was primarily due to an $18.3 million increase in the unrealized loss on available-for-sale securities due to a decline in longer-term rates in the quarter. The increase in the unrealized loss was partially offset by new investment purchases from the reinvestment of cash flows on the portfolio in the current quarter. Investment purchases in the second quarter 2023 had a weighted average, tax equivalent yield of 5.07%.

The average duration of the investment portfolio was 5.3 years at June 30, 2023. Due to the shorter average duration of the loan portfolio, of approximately 3 years, the Company leverages the investment portfolio to lengthen the overall duration of the balance sheet, primarily using high-quality municipal securities. The expected cash flow from pay downs, maturities and interest over the next 12 months is approximately $270 million. The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities⁴ was 8.25% at June 30, 2023, compared to 8.43% at March 31, 2023.

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

	Quarter ended
($ in thousands)	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
C&I	$	2,029,370		$	2,005,539		$	1,904,654		$	1,780,677		$	1,641,740
CRE investor owned		2,290,701			2,239,932			2,176,424			2,106,458			1,977,806
CRE owner occupied		1,208,675			1,173,985			1,174,094			1,133,467			1,118,895
SBA loans*		1,327,667			1,315,732			1,312,378			1,269,065			1,284,279
Sponsor finance*		879,491			677,529			635,061			650,102			647,180
Life insurance premium financing*		912,274			859,910			817,115			779,606			748,376
Tax credits*		609,137			547,513			559,605			507,681			550,662
SBA PPP loans		5,173			5,438			7,272			13,165			49,175
Residential real estate		354,588			348,726			379,924			381,634			391,867
Construction and land development		599,375			590,509			534,753			513,452			626,577
Other		296,172			247,105			235,858			219,680			232,619
Total loans	$	10,512,623		$	10,011,918		$	9,737,138		$	9,354,987		$	9,269,176
Total loan yield		6.64	%		6.33	%		5.87	%		5.10	%		4.51	%
Variable interest rate loans to total loans		62	%		63	%		63	%		63	%		64	%
*Specialty loan category

Loans totaled $10.5 billion at June 30, 2023, increasing $500.7 million, compared to the linked quarter. The increase was broad based across geographic regions and lines of business, particularly within the sponsor finance specialty area. Average line utilization was approximately 45% for the second quarter 2023, compared to 42% and 44% for the linked and prior year quarters, respectively. The weighted average life of the loan portfolio is approximately 3 years at June 30, 2023.

Asset Quality
The following table presents the categories of nonperforming assets and related ratios for the most recent five quarters:

	Quarter ended
($ in thousands)	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Nonperforming loans*	$	16,112		$	11,972		$	9,981		$	18,184		$	19,560
Other		—			250			269			269			955
Nonperforming assets*	$	16,112		$	12,222		$	10,250		$	18,453		$	20,515
Nonperforming loans to total loans		0.15	%		0.12	%		0.10	%		0.19	%		0.21	%
Nonperforming assets to total assets		0.12	%		0.09	%		0.08	%		0.14	%		0.16	%
Allowance for credit losses to total loans		1.34	%		1.38	%		1.41	%		1.50	%		1.52	%
Net charge-offs (recoveries)	$	2,973		$	(264	)	$	2,075		$	478		$	(175	)
*Guaranteed balances excluded	$	6,666		$	6,835		$	6,708		$	6,532		$	6,063

Nonperforming assets increased $3.9 million during the second quarter 2023 and decreased $4.4 million from the prior year quarter. The increase from the linked quarter was primarily related to the addition of one credit relationship that was partially written down in the period. Annualized net charge-offs totaled 12 basis points of average loans in the second quarter 2023, compared to a net recovery of one basis point in the linked and prior year quarters.

The provision for credit losses totaled $6.3 million in the second quarter 2023, compared to $4.2 million and $0.7 million in the linked quarter and prior year quarter, respectively. The provision for credit losses in the second quarter 2023 was primarily related to loan growth, net charge-offs, and a change in forecasted economic factors. The provision in the linked quarter was primarily related to the impairment of an available-for-sale investment security of a failed bank and loan growth. The allowance for credit losses to total loans was 1.34% at June 30, 2023, compared to 1.38% and 1.52% in the linked and prior year quarters, respectively, and is reflective of the trend in credit quality.

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

	Quarter ended
($ in thousands)	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Noninterest-bearing demand accounts	$	3,880,561		$	4,192,523		$	4,642,732		$	4,642,539		$	4,746,478
Interest-bearing demand accounts		2,629,339			2,395,901			2,256,295			2,270,898			2,197,957
Money market and savings accounts		3,577,856			3,672,539			3,399,415			3,617,249			3,562,982
Brokered certificates of deposit		893,808			369,505			118,968			129,039			129,064
Other certificates of deposit		638,296			524,168			411,740			397,869			456,137
Total deposit portfolio	$	11,619,860		$	11,154,636		$	10,829,150		$	11,057,594		$	11,092,618
Noninterest-bearing deposits to total deposits		33.4	%		37.6	%		42.9	%		42.0	%		42.8	%
Total costs of deposits		1.46	%		0.92	%		0.53	%		0.31	%		0.13	%

Total deposits at June 30, 2023 were $11.6 billion, an increase of $465.2 million and $527.2 million from the linked quarter and prior year quarter, respectively. The increase from the linked quarter includes $524.3 million in brokered certificates of deposit that are a stable funding source to support loan growth. This strategy helped preserve wholesale borrowing capacity and liquidity measures. The mix of the deposit portfolio continued the shift from noninterest bearing demand deposits to higher yielding categories that began in the first quarter 2023. Competitive pricing pressures and the Federal Reserve’s monetary policy actions have continued to pressure industry-wide deposit flows. Reciprocal deposits, which are placed through third party programs to provide FDIC insurance on larger deposit relationships, totaled $926.6 million at June 30, 2023, compared to $486.7 million at March 31, 2023.

Total estimated insured deposits, which includes collateralized deposits, reciprocal accounts and accounts that qualify for pass-through insurance, totaled $8.3 billion, or 72% of total deposits, at the end of June 30, 2023, compared to $7.7 billion, or 69% of total deposits, in the linked quarter.

Noninterest Income
The following table presents a comparative summary of the major components of noninterest income for the periods indicated:

	Linked quarter comparison									Prior year comparison
	Quarter ended									Quarter ended
($ in thousands)	June 30, 2023		March 31, 2023		Increase (decrease)					June 30, 2022		Increase (decrease)
Deposit service charges		3,910		4,128	$	(218	)	(5	)%		4,749	$	(839	)	(18	)%
Wealth management revenue		2,472		2,516		(44	)	(2	)%		2,533		(61	)	(2	)%
Card services revenue		2,464		2,338		126		5	%		3,514		(1,050	)	(30	)%
Tax credit income		368		1,813		(1,445	)	(80	)%		1,186		(818	)	(69	)%
Other income		5,076		6,103		(1,027	)	(17	)%		2,212		2,864		129	%
Total noninterest income	$	14,290	$	16,898	$	(2,608	)	(15	)%	$	14,194	$	96		1	%

Total noninterest income was $14.3 million for the current quarter, a decrease of $2.6 million from the linked quarter and stable with the prior year quarter. The $2.6 million decrease from the linked quarter was primarily due to decreases in tax credit income and other income. Tax credit income is typically highest in the fourth quarter of each year and will vary in other periods based on transaction volumes and fair value changes on credits carried at fair value. The decrease in other income was primarily due to gains on the sale of investment securities and SBA loans in the linked quarter that did not reoccur in the second quarter 2023.

The following table presents a comparative summary of the major components of other income for the periods indicated:

	Linked quarter comparison									Prior year comparison
	Quarter ended									Quarter ended
($ in thousands)	June 30, 2023		March 31, 2023		Increase (decrease)					June 30, 2022		Increase (decrease)
BOLI	$	797	$	791	$	6		1	%	$	748	$	49	7	%
Community development investments		2,077		595		1,482		249	%		193		1,884	976	%
Private equity fund distribution		371		1,749		(1,378	)	(79	)%		240		131	55	%
Servicing fees		407		512		(105	)	(21	)%		165		242	147	%
Swap fees		173		250		(77	)	(31	)%		102		71	70	%
Miscellaneous income		1,251		2,206		(955	)	(43	)%		764		487	64	%
Total other income	$	5,076	$	6,103	$	(1,027	)	(17	)%	$	2,212	$	2,864	129	%

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. Swap fee income is generated from customer hedging activities and varies based on customer transaction volume. The decrease in miscellaneous income from the linked quarter was primarily due to the gains on the sale of SBA loans and investment securities that were recognized in the linked quarter.

Noninterest Expense
The following table presents a comparative summary of the major components of noninterest expense for the periods indicated:

	Linked quarter comparison									Prior year comparison
	Quarter ended									Quarter ended
($ in thousands)	June 30, 2023		March 31, 2023		Increase (decrease)					June 30, 2022		Increase (decrease)
Employee compensation and benefits	$	41,641	$	42,503	$	(862	)	(2	)%	$	36,028	$	5,613		16	%
Occupancy		3,954		4,061		(107	)	(3	)%		4,309		(355	)	(8	)%
Deposit costs		16,980		12,720		4,260		33	%		5,905		11,075		188	%
Other expense		23,381		21,699		1,682		8	%		19,182		4,199		22	%
Total noninterest expense	$	85,956	$	80,983	$	4,973		6	%	$	65,424	$	20,532		31	%

Employee compensation and benefits decreased $0.9 million from the linked quarter due to a $2.8 million decrease in benefits, primarily employer payroll taxes and 401(k) expense that are seasonally higher in the first quarter each year. The decrease in benefits was partially offset by a $1.9 million increase in salaries and variable compensation due to a full quarter of merit increases that became effective on March 1, 2023, and an expanded associate base. Deposit costs relate to certain specialized deposit businesses that are impacted by higher interest rates as well as increasing average balances. Deposit costs increased $4.3 million from the linked quarter primarily due to higher average balances and an increase in expenses related to the earnings credit earned on these accounts. The linked quarter deposit costs were also lower due to the expiration of certain earnings credits that were forfeited. Other expense increased $1.7 million from the linked quarter, primarily related to a $1.5 million increase in operational losses.

The increase in noninterest expense of $20.5 million from the prior year quarter was primarily an increase in the associate base, merit increases throughout 2022 and 2023, and an increase in variable deposit costs.

For the second quarter 2023, the Company’s core efficiency ratio⁵ was 54.0%, compared to 50.5% for the linked quarter and 51.0% for the prior year quarter.

Income Taxes
The Company’s effective tax rate was 22% for each of the current, linked and prior year quarters.

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

	Quarter ended
($ in thousands)	June 30, 2023*			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Shareholders’ equity	$	1,618,233		$	1,592,820		$	1,522,263		$	1,446,218		$	1,447,412
Total risk-based capital to risk-weighted assets		14.1	%		14.3	%		14.2	%		14.2	%		14.2	%
Tier 1 capital to risk weighted assets		12.5	%		12.6	%		12.6	%		12.6	%		12.5	%
Common equity tier 1 capital to risk-weighted assets		11.1	%		11.2	%		11.1	%		11.0	%		10.9	%
Leverage ratio		11.0	%		11.1	%		10.9	%		10.4	%		9.8	%
Tangible common equity to tangible assets		8.65	%		8.81	%		8.43	%		7.86	%		7.80	%
*Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

Total equity was $1.6 billion at June 30, 2023, an increase of $25.4 million from the linked quarter. The increase was primarily due to current period net income of $49.1 million. This increase was partially offset by a $17.5 million decrease in accumulated other comprehensive income, primarily due to a net fair value decrease in the Company’s fixed-rate, available-for-sale investment portfolio, and common and preferred stock dividends of $10.3 million. The Company’s tangible common book value per share was $31.23 at June 30, 2023, compared to $30.55 and $26.63 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.

________________________________

^1Tangible common equity to tangible assets and return on tangible common equity are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

^2 Pre-provision net revenue is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

^3 Tangible common equity to tangible assets ratio and the tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities are non-GAAP measures. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

^4 The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities is a non-GAAP measure. Refer to discussion and reconciliation of these measures in the accompanying financial tables.

^5 Core efficiency ratio is a non-GAAP measure. Refer to discussion and reconciliation of this measure in the accompanying financial tables.

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, ROATCE, PPNR return on average assets (“PPNR ROAA”), core efficiency ratio, the tangible common equity ratio, and tangible book value per common share, 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, ROATCE, PPNR ROAA, core efficiency ratio, the tangible common equity ratio, and tangible book value per common share, 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, July 25, 2023. During the call, management will review the second quarter 2023 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/EFSC2Q2023earnings to register. The replay will be available for at least two weeks following the conference call.

About Enterprise Financial Services Corp
Enterprise Financial Services Corp (Nasdaq: EFSC), with approximately $13.9 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, Florida, 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, liquidity, yields and returns, loan diversification and credit management, shareholder value creation and the impact of 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 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, our ability to attract and retain deposits and access to other sources of liquidity, 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, 2022, 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															Six months ended
(in thousands, except per share data)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
EARNINGS SUMMARY
Net interest income	$	140,692		$	139,529		$	138,835		$	124,290		$	109,613		$	280,221		$	210,778
Provision (benefit) for credit losses		6,339			4,183			2,123			676			658			10,522			(3,410	)
Noninterest income		14,290			16,898			16,873			9,454			14,194			31,188			32,835
Noninterest expense		85,956			80,983			77,149			68,843			65,424			166,939			128,224
Income before income tax expense		62,687			71,261			76,436			64,225			57,725			133,948			118,799
Income tax expense		13,560			15,523			16,435			14,025			12,576			29,083			25,957
Net income		49,127			55,738			60,001			50,200			45,149			104,865			92,842
Preferred stock dividends		937			938			937			937			938			1,875			2,167
Net income available to common shareholders	$	48,190		$	54,800		$	59,064		$	49,263		$	44,211		$	102,990		$	90,675
Diluted earnings per common share	$	1.29		$	1.46		$	1.58		$	1.32		$	1.19		$	2.75		$	2.41
Return on average assets		1.44	%		1.72	%		1.83	%		1.51	%		1.34	%		1.58	%		1.38	%
Return on average common equity		12.48	%		14.85	%		16.52	%		13.74	%		12.65	%		13.64	%		12.76	%
ROATCE^1		16.53	%		19.93	%		22.62	%		18.82	%		17.44	%		18.18	%		17.46	%
Net interest margin (tax equivalent)		4.49	%		4.71	%		4.66	%		4.10	%		3.55	%		4.60	%		3.41	%
Efficiency ratio		55.46	%		51.77	%		49.55	%		51.47	%		52.84	%		53.61	%		52.63	%
Core efficiency ratio^1		54.04	%		50.47	%		48.10	%		49.80	%		51.03	%		52.25	%		50.82	%
Loans	$	10,512,623		$	10,011,918		$	9,737,138		$	9,354,987		$	9,269,176
Average loans	$	10,284,873		$	9,795,045		$	9,423,984		$	9,230,738		$	9,109,131		$	10,041,312		$	9,057,788
Assets	$	13,871,154		$	13,325,982		$	13,054,172		$	12,994,787		$	13,084,506
Average assets	$	13,671,985		$	13,131,195		$	12,986,568		$	13,158,121		$	13,528,474		$	13,403,084		$	13,571,002
Deposits	$	11,619,860		$	11,154,636		$	10,829,150		$	11,057,594		$	11,092,618
Average deposits	$	11,387,813		$	10,913,489		$	11,002,614		$	11,154,895		$	11,530,432		$	11,151,961		$	11,512,422
Period end common shares outstanding		37,359			37,311			37,253			37,223			37,206
Dividends per common share	$	0.25		$	0.25		$	0.24		$	0.23		$	0.22		$	0.50		$	0.43
Tangible book value per common share	$	31.23		$	30.55		$	28.67		$	26.62		$	26.63
Tangible common equity to tangible assets^1		8.65	%		8.81	%		8.43	%		7.86	%		7.80	%
Total risk-based capital to risk-weighted assets^2		14.1	%		14.3	%		14.2	%		14.2	%		14.2	%
^1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.
^2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

ENTERPRISE FINANCIAL SERVICES CORP CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended											Six months ended
($ in thousands, except per share data)	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022			Jun 30, 2022		Jun 30, 2023		Jun 30, 2022
INCOME STATEMENTS
NET INTEREST INCOME
Interest income	$	187,897	$	169,033	$	156,737	$	135,695		$	116,069	$	356,930	$	222,650
Interest expense		47,205		29,504		17,902		11,405			6,456		76,709		11,872
Net interest income		140,692		139,529		138,835		124,290			109,613		280,221		210,778
Provision (benefit) for credit losses		6,339		4,183		2,123		676			658		10,522		(3,410	)
Net interest income after provision (benefit) for credit losses		134,353		135,346		136,712		123,614			108,955		269,699		214,188
NONINTEREST INCOME
Deposit service charges		3,910		4,128		4,463		4,951			4,749		8,038		8,912
Wealth management revenue		2,472		2,516		2,423		2,432			2,533		4,988		5,155
Card services revenue		2,464		2,338		2,345		2,652			3,514		4,802		6,554
Tax credit income (loss)		368		1,813		2,389		(3,625	)		1,186		2,181		3,794
Other income		5,076		6,103		5,253		3,044			2,212		11,179		8,420
Total noninterest income		14,290		16,898		16,873		9,454			14,194		31,188		32,835
NONINTEREST EXPENSE
Employee compensation and benefits		41,641		42,503		38,175		36,999			36,028		84,144		71,855
Occupancy		3,954		4,061		4,248		4,497			4,309		8,015		8,895
Deposit costs		16,980		12,720		13,256		7,661			5,905		29,700		10,165
Other expense		23,381		21,699		21,470		19,686			19,182		45,080		37,309
Total noninterest expense		85,956		80,983		77,149		68,843			65,424		166,939		128,224
Income before income tax expense		62,687		71,261		76,436		64,225			57,725		133,948		118,799
Income tax expense		13,560		15,523		16,435		14,025			12,576		29,083		25,957
Net income	$	49,127	$	55,738	$	60,001	$	50,200		$	45,149	$	104,865	$	92,842
Preferred stock dividends		937		938		937		937			938		1,875		2,167
Net income available to common shareholders	$	48,190	$	54,800	$	59,064	$	49,263		$	44,211	$	102,990	$	90,675
Basic earnings per common share	$	1.29	$	1.47	$	1.59	$	1.32		$	1.19	$	2.76	$	2.42
Diluted earnings per common share	$	1.29	$	1.46	$	1.58	$	1.32		$	1.19	$	2.75	$	2.41

ENTERPRISE FINANCIAL SERVICES CORP CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
BALANCE SHEET
ASSETS
Cash and due from banks	$	202,702		$	210,813		$	229,580		$	264,078		$	271,763
Interest-earning deposits		125,328			81,241			69,808			489,825			680,343
Securities and other investments		2,340,821			2,338,746			2,309,512			2,171,942			2,172,318
Loans held for sale		551			261			1,228			785			4,615
Loans		10,512,623			10,011,918			9,737,138			9,354,987			9,269,176
Allowance for credit losses		(141,319	)		(138,295	)		(136,932	)		(140,572	)		(140,546	)
Total loans, net		10,371,304			9,873,623			9,600,206			9,214,415			9,128,630
Fixed assets, net		41,988			42,340			42,985			43,882			46,028
Goodwill		365,164			365,164			365,164			365,164			365,164
Intangible assets, net		14,544			15,680			16,919			18,217			19,528
Other assets		408,752			398,114			418,770			426,479			396,117
Total assets	$	13,871,154		$	13,325,982		$	13,054,172		$	12,994,787		$	13,084,506
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing deposits	$	3,880,561		$	4,192,523		$	4,642,732		$	4,642,539		$	4,746,478
Interest-bearing deposits		7,739,299			6,962,113			6,186,418			6,415,055			6,346,140
Total deposits		11,619,860			11,154,636			10,829,150			11,057,594			11,092,618
Subordinated debentures and notes		155,706			155,569			155,433			155,298			155,164
FHLB advances		150,000			100,000			100,000			—			50,000
Other borrowings		199,390			213,489			324,119			197,422			226,695
Other liabilities		127,965			109,468			123,207			138,255			112,617
Total liabilities		12,252,921			11,733,162			11,531,909			11,548,569			11,637,094
Shareholders’ equity:
Preferred stock		71,988			71,988			71,988			71,988			71,988
Common stock		374			373			373			372			372
Additional paid-in capital		988,355			984,281			982,660			979,543			976,684
Retained earnings		680,981			642,153			597,574			547,506			506,849
Accumulated other comprehensive loss		(123,465	)		(105,975	)		(130,332	)		(153,191	)		(108,481	)
Total shareholders’ equity		1,618,233			1,592,820			1,522,263			1,446,218			1,447,412
Total liabilities and shareholders’ equity	$	13,871,154		$	13,325,982		$	13,054,172		$	12,994,787		$	13,084,506

	Six months ended
	June 30, 2023						June 30, 2022
($ in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
AVERAGE BALANCE SHEET
ASSETS
Interest-earning assets:
Loans^1, 2	$	10,041,312	$	323,076	6.49	%	$	9,057,788	$	198,629	4.42	%
Securities^2		2,293,249		34,667	3.05			1,996,442		23,913	2.42
Interest-earning deposits		140,206		3,290	4.73			1,590,569		3,313	0.42
Total interest-earning assets		12,474,767		361,033	5.84			12,644,799		225,855	3.60
Noninterest-earning assets		928,317						926,203
Total assets	$	13,403,084					$	13,571,002
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing demand accounts	$	2,356,708	$	16,027	1.37	%	$	2,416,889	$	1,194	0.10	%
Money market accounts		2,873,715		35,970	2.52			2,819,659		3,730	0.27
Savings accounts		709,490		457	0.13			836,249		137	0.03
Certificates of deposit		946,527		13,579	2.89			599,067		1,648	0.55
Total interest-bearing deposits		6,886,440		66,033	1.93			6,671,864		6,709	0.20
Subordinated debentures and notes		155,565		4,840	6.27			155,026		4,477	5.82
FHLB advances		104,887		2,611	5.02			50,000		392	1.58
Securities sold under agreements to repurchase		188,958		1,453	1.55			232,229		101	0.09
Other borrowings		94,048		1,772	3.80			22,123		193	1.76
Total interest-bearing liabilities		7,429,898		76,709	2.08			7,131,242		11,872	0.34
Noninterest-bearing liabilities:
Demand deposits		4,265,521						4,840,558
Other liabilities		112,625						94,129
Total liabilities		11,808,044						12,065,929
Shareholders' equity		1,595,040						1,505,073
Total liabilities and shareholders' equity	$	13,403,084					$	13,571,002
Total net interest income			$	284,324					$	213,983
Net interest margin					4.60	%					3.41	%
^1 Average balances include nonaccrual loans. Interest income includes loan fees of $7.4 million and $9.3 million for the six months ended June 30, 2023 and June 30, 2022, respectively.
^2 Non-taxable income is presented on a fully tax-equivalent basis using a 25.2% tax rate. The tax-equivalent adjustments were $4.1 million and $3.2 million for the six months ended June 30, 2023 and 2022, respectively.

ENTERPRISE FINANCIAL SERVICES CORP CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)
	Quarter ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
LOAN PORTFOLIO
Commercial and industrial	$	4,360,862		$	4,032,189		$	3,859,882		$	3,709,893		$	3,596,701
Commercial real estate		4,802,293			4,699,302			4,628,371			4,438,647			4,294,375
Construction real estate		671,573			663,264			611,565			583,649			724,163
Residential real estate		368,867			364,059			395,537			397,450			413,727
Other		309,028			253,104			241,783			225,348			240,210
Total loans	$	10,512,623		$	10,011,918		$	9,737,138		$	9,354,987		$	9,269,176
DEPOSIT PORTFOLIO
Noninterest-bearing demand accounts	$	3,880,561		$	4,192,523		$	4,642,732		$	4,642,539		$	4,746,478
Interest-bearing demand accounts		2,629,339			2,395,901			2,256,295			2,270,898			2,197,957
Money market and savings accounts		3,577,856			3,672,539			3,399,415			3,617,249			3,562,982
Brokered certificates of deposit		893,808			369,505			118,968			129,039			129,064
Other certificates of deposit		638,296			524,168			411,740			397,869			456,137
Total deposits	$	11,619,860		$	11,154,636		$	10,829,150		$	11,057,594		$	11,092,618
AVERAGE BALANCES
Loans	$	10,284,873		$	9,795,045		$	9,423,984		$	9,230,738		$	9,109,131
Securities		2,297,995			2,288,451			2,204,211			2,202,255			2,068,119
Interest-earning assets		12,756,653			12,189,750			11,995,295			12,198,251			12,579,211
Assets		13,671,985			13,131,195			12,986,568			13,158,121			13,528,474
Deposits		11,387,813			10,913,489			11,002,614			11,154,895			11,530,432
Shareholders’ equity		1,621,337			1,568,451			1,490,592			1,494,504			1,474,267
Tangible common equity^1		1,169,091			1,115,052			1,035,896			1,038,495			1,016,940
YIELDS (tax equivalent)
Loans		6.64	%		6.33	%		5.87	%		5.10	%		4.51	%
Securities		3.06			3.03			2.91			2.65			2.51
Interest-earning assets		5.97			5.69			5.25			4.47			3.76
Interest-bearing deposits		2.26			1.56			0.94			0.54			0.24
Deposits		1.46			0.92			0.53			0.31			0.13
Subordinated debentures and notes		6.27			6.28			6.07			5.91			5.84
FHLB advances and other borrowed funds		3.45			2.60			1.39			0.66			0.51
Interest-bearing liabilities		2.40			1.72			1.07			0.67			0.37
Net interest margin		4.49			4.71			4.66			4.10			3.55
^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
(in thousands, except per share data)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
ASSET QUALITY
Net charge-offs (recoveries)	$	2,973		$	(264	)	$	2,075		$	478		$	(175	)
Nonperforming loans		16,112			11,972			9,981			18,184			19,560
Classified assets		108,065			110,384			99,122			98,078			96,801
Nonperforming loans to total loans		0.15	%		0.12	%		0.10	%		0.19	%		0.21	%
Nonperforming assets to total assets		0.12	%		0.09	%		0.08	%		0.14	%		0.16	%
Allowance for credit losses to total loans		1.34	%		1.38	%		1.41	%		1.50	%		1.52	%
Allowance for credit losses to nonperforming loans		877.1	%		1,155.2	%		1,371.9	%		773.1	%		718.5	%
Net charge-offs (recoveries) to average loans -annualized		0.12	%		(0.01	)%		0.09	%		0.02	%		(0.01	)%
WEALTH MANAGEMENT
Trust assets under management	$	1,992,563		$	1,956,146		$	1,885,394		$	1,691,230		$	1,757,228
MARKET DATA
Book value per common share	$	41.39		$	40.76		$	38.93		$	36.92		$	36.97
Tangible book value per common share^1	$	31.23		$	30.55		$	28.67		$	26.62		$	26.63
Market value per share	$	39.10		$	44.59		$	48.96		$	44.04		$	41.50
Period end common shares outstanding		37,359			37,311			37,253			37,223			37,206
Average basic common shares		37,347			37,305			37,257			37,241			37,243
Average diluted common shares		37,495			37,487			37,415			37,348			37,282
CAPITAL
Total risk-based capital to risk-weighted assets^2		14.1	%		14.3	%		14.2	%		14.2	%		14.2	%
Tier 1 capital to risk-weighted assets^2		12.5	%		12.6	%		12.6	%		12.6	%		12.5	%
Common equity tier 1 capital to risk-weighted assets^2		11.1	%		11.2	%		11.1	%		11.0	%		10.9	%
Tangible common equity to tangible assets^1		8.65	%		8.81	%		8.43	%		7.86	%		7.80	%
^1Refer to Reconciliations of Non-GAAP Financial Measures table for a reconciliation of these measures to GAAP.
^2Capital ratios for the current quarter are preliminary and subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review.

ENTERPRISE FINANCIAL SERVICES CORP RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
	Quarter ended															Six months ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
CORE EFFICIENCY RATIO
Net interest income (GAAP)	$	140,692		$	139,529		$	138,835		$	124,290		$	109,613		$	280,221		$	210,778
Tax-equivalent adjustment		2,062			2,041			1,983			1,854			1,699			4,103			3,205
Noninterest income (GAAP)		14,290			16,898			16,873			9,454			14,194			31,188			32,835
Less gain on sale of investment securities		—			381			—			—			—			381			—
Less gain (loss) on sale of other real estate owned		97			90			—			(22	)		(90	)		187			(71	)
Core revenue (non-GAAP)		156,947			157,997			157,691			135,620			125,596			314,944			246,889
Noninterest expense (GAAP)		85,956			80,983			77,149			68,843			65,424			166,939			128,224
Less amortization on intangibles		1,136			1,239			1,299			1,310			1,328			2,375			2,758
Core noninterest expense (non-GAAP)		84,820			79,744			75,850			67,533			64,096			164,564			125,466
Core efficiency ratio (non-GAAP)		54.04	%		50.47	%		48.10	%		49.80	%		51.03	%		52.25	%		50.82	%

	Quarter ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
TANGIBLE COMMON EQUITY, TANGIBLE BOOK VALUE PER SHARE AND TANGIBLE COMMON EQUITY RATIO
Shareholders’ equity	$	1,618,233		$	1,592,820		$	1,522,263		$	1,446,218		$	1,447,412
Less preferred stock		71,988			71,988			71,988			71,988			71,988
Less goodwill		365,164			365,164			365,164			365,164			365,164
Less intangible assets		14,544			15,680			16,919			18,217			19,528
Tangible common equity	$	1,166,537		$	1,139,988		$	1,068,192		$	990,849		$	990,732
Less net unrealized losses on HTM portfolio, after tax of 25.2%		53,611			48,630			61,435			81,752			60,512
Tangible common equity adjusted for unrealized losses on HTM securities	$	1,112,926		$	1,091,358		$	1,006,757		$	909,097		$	930,220
Common shares outstanding		37,359			37,311			37,253			37,223			37,206
Tangible book value per share	$	31.23		$	30.55		$	28.67		$	26.62		$	26.63
Total assets	$	13,871,154		$	13,325,982		$	13,054,172		$	12,994,787		$	13,084,506
Less goodwill		365,164			365,164			365,164			365,164			365,164
Less intangible assets		14,544			15,680			16,919			18,217			19,528
Tangible assets	$	13,491,446		$	12,945,138		$	12,672,089		$	12,611,406		$	12,699,814
Tangible common equity to tangible assets		8.65	%		8.81	%		8.43	%		7.86	%		7.80	%
Tangible common equity to tangible assets adjusted for unrealized losses on HTM securities		8.25	%		8.43	%		7.94	%		7.21	%		7.32	%

	Quarter Ended															Six months ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
RETURN ON AVERAGE TANGIBLE COMMON EQUITY (ROATCE)
Average shareholder’s equity	$	1,621,337		$	1,568,451		$	1,490,592		$	1,494,504		$	1,474,267		$	1,595,040		$	1,505,073
Less average preferred stock		71,988			71,988			71,988			71,988			71,988			71,988			71,988
Less average goodwill		365,164			365,164			365,164			365,164			365,164			365,164			365,164
Less average intangible assets		15,094			16,247			17,544			18,857			20,175			15,667			20,854
Average tangible common equity	$	1,169,091		$	1,115,052		$	1,035,896		$	1,038,495		$	1,016,940		$	1,142,221		$	1,047,067
Net income available to common shareholders (GAAP)	$	48,190		$	54,800		$	59,064		$	49,263		$	44,211		$	102,990		$	90,675
ROATCE		16.53	%		19.93	%		22.62	%		18.82	%		17.44	%		18.18	%		17.46	%

	Quarter ended															Six months ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
CALCULATION OF PRE-PROVISION NET REVENUE (PPNR)
Net interest income	$	140,692		$	139,529		$	138,835		$	124,290		$	109,613		$	280,221		$	210,778
Noninterest income		14,290			16,898			16,873			9,454			14,194			31,188			32,835
Less gain on sale of investment securities		—			381			—			—			—			381			—
Less gain (loss) on sale of other real estate owned		97			90			—			(22	)		(90	)		187			(71	)
Less noninterest expense		85,956			80,983			77,149			68,843			65,424			166,939			128,224
PPNR	$	68,929		$	74,973		$	78,559		$	64,923		$	58,473		$	143,902		$	115,460
Average assets	$	13,671,985		$	13,131,195		$	12,986,568		$	13,158,121		$	13,528,474		$	13,403,084		$	13,571,002
ROAA - GAAP net income		1.44	%		1.72	%		1.83	%		1.51	%		1.34	%		1.58	%		1.38	%
PPNR ROAA - PPNR		2.02	%		2.32	%		2.40	%		1.96	%		1.73	%		2.17	%		1.72	%

	Quarter ended
($ in thousands)	Jun 30, 2023			Mar 31, 2023
CALCULATION OF ESTIMATED INSURED DEPOSITS
Estimated uninsured deposits per Call Report	$	3,821,266		$	4,284,815
Collateralized/affiliate deposits		(508,100	)		(816,602	)
Accrued interest on deposits		(5,052	)		(1,688	)
Adjusted uninsured/uncollateralized deposits		3,308,114			3,466,525
Estimated insured/collateralized deposits		8,311,746			7,688,111
Total deposits	$	11,619,860		$	11,154,636