ENTERPRISE FINANCIAL SERVICES CORP - FORM 8-K - EX-99.1 - PRESS RELEASE DATED JANUARY 25, 2011

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8-K - CURRENT REPORT - ENTERPRISE FINANCIAL SERVICES CORP	enterprise_8k.htm

Exhibit 99.1

For more information contact:
Jerry Mueller, Senior Vice President (314) 512-7251
Ann Marie Mayuga, AMM Communications (314) 485-9499

ENTERPRISE FINANCIAL REPORTS 2010 FOURTH QUARTER
AND YEAR END RESULTS

2010 earnings increase to $9.1 million, or $0.45 per fully diluted share
Core deposits increase $356 million, or 20%, over December 31, 2009
Nonperforming loans reduced 11% in the fourth quarter to 2.45% of loans
Enterprise Bank & Trust acquires Legacy Bank in third FDIC-assisted Arizona transaction

St. Louis, January 25, 2011. Enterprise Financial Services Corp (NASDAQ: EFSC) (the “Company”) reported net income of $9.1 million for the year ended December 31, 2010 compared to a net loss of $48.0 million for the prior year. The net loss for 2009 was primarily attributable to a $45.4 million non-cash accounting charge to eliminate goodwill related to the Company’s banking segment. After deducting dividends on preferred stock, the Company reported net income of $0.45 per fully diluted share for 2010 compared to a net loss of $3.92 per fully diluted share for 2009.

For the fourth quarter of 2010, the Company reported net income of $6.4 million compared to a net loss of $854,000 for the prior year period. After deducting dividends on preferred stock, the Company reported net income of $0.38 per diluted share for the fourth quarter of 2010 compared to a net loss of $0.12 per diluted share for the fourth quarter of 2009.

In addition, on January 7, 2011, Enterprise Bank & Trust (“Enterprise”), the Company’s banking subsidiary, entered into a loss sharing agreement with the FDIC and acquired certain assets and assumed certain liabilities of Legacy Bank of Scottsdale, Arizona (“Legacy”). The acquisition consisted of assets of approximately $131.9 million and total deposits of approximately $113.7 million, including approximately $70.2 million of brokered and CDARS time deposits. Approximately $43.5 million of the deposits were assumed at a premium of 1%. The assets were purchased at a 7.6% discount to their historic book value. As part of the transaction, Enterprise and the FDIC have entered into a loss sharing agreement whereby the FDIC will reimburse Enterprise for 80% of losses incurred on certain loans and other real estate (“covered assets”). In addition, Enterprise also acquired approximately $55.6 million of discretionary and $13.6 million of non-discretionary trust assets. This transaction will not materially change the Company’s regulatory capital ratios and is anticipated to add approximately $0.15 to $0.20 to Enterprise’s 2011 earnings per share, subject to the underlying assumptions and final valuations of the assets.

Peter Benoist, President and Chief Executive Officer, commented, “Enterprise's fourth quarter results represent a continuing trend in increased quarterly earnings per share and improved operating fundamentals. Asset quality trends, including fewer risk rating downgrades and reduced nonperforming loan totals, are encouraging. Disciplined pricing on both loans and deposits coupled with the strong yields on covered loans acquired in our July 2010 FDIC-assisted acquisition of certain assets of Home National have allowed us to maintain solid net interest margins as we continue to position for improvement in the overall economy. While the Company experienced a modest decline in net loans outstanding during the quarter, our loan pipelines remain strong particularly in the Commercial & Industrial category.”

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Benoist continued, “Solid core deposit growth, particularly in the fourth quarter, double digit increases in Wealth Management revenues, and a strong emphasis on expense management have all contributed to strengthening our operating results.”

On a pre-tax, pre-provision basis, the Company’s operating income from continuing operations was $13.6 million in the fourth quarter of 2010, an 81% increase from the prior year period of $7.5 million. On a linked quarter basis, pre-tax, pre-provision operating income declined $2.8 million, or 17%, primarily due to $900,000 in lower net gains on sales of tax credits, a $750,000 accrual against a potential fraud loss on a depository account and approximately $1.2 million of various expenses related to covered assets, variable compensation, and reserves related to unfunded commitments.

Pre-tax, pre-provision income from continuing operations, which is a non-GAAP (Generally Accepted Accounting Principles) financial measure, is presented because the Company believes adjusting its results to exclude discontinued operations, loan loss provision expense, and unusual gains or losses provides shareholders with a more comparable basis for evaluating period-to-period operating results. A schedule reconciling GAAP pre-tax income (loss) to pre-tax, pre-provision income from continuing operations is provided in the attached tables.

Banking Segment

Deposits
Core deposits grew significantly in the fourth quarter of 2010. These deposits, which exclude brokered CDs and include reciprocal CDARS deposits, increased $319.2 million, or 18%, from September 30, 2010. The increase was due to a $61.9 million increase in demand deposits, a $168.5 million increase in money market accounts and other interest-bearing deposit accounts and a $99.8 million increase in non-CDARS certificates of deposit. Reciprocal CDARS deposits decreased by $11.0 million in the fourth quarter of 2010.

While the Company historically experiences large increases in fourth quarter core deposits (followed by first quarter reductions), the fourth quarter 2010 growth was exceptional. Approximately $34.0 million of the money market growth and $73.0 million of the certificate of deposit growth was related to our new Enterprise Advisory Services initiative, a proprietary deposit platform marketed to registered investment advisory firms.

Core deposits increased $355.8 million, or 20%, to $2.1 billion from December 31, 2009. Noninterest-bearing demand deposits increased $76.4 million, or 26%, in 2010 and represented 16% of total deposits at December 31, 2010, up from 15% at December 31, 2009. Management believes a portion of the growth in noninterest-bearing demand deposits is the result of the FDIC deposit guarantee and relatively low rates on non-guaranteed accounts.

Total deposits at December 31, 2010 were $2.3 billion, an increase of $356.3 million, or 18%, over December 31, 2009 and $257.9 million, or 13%, higher than September 30, 2010. The Company has maintained a favorable deposit mix, with core deposits representing 93% of total deposits at December 31, 2010, unchanged from the prior year period. CDARS deposits totaled $160.5 million at December 31, 2010 compared to $134.8 million at December 31, 2009.

Loans
Portfolio loans totaled $1.9 billion at December 31, 2010, including $127 million of loans covered under FDIC loss share agreements. While loan pipelines continue to strengthen, particularly in the St. Louis market, payoffs and paydowns more than offset the new loans generated in the quarter. Excluding the loans covered under loss share, in the fourth quarter of 2010, portfolio loans decreased $30.3 million, or 1.7%, from September 30, 2010 as the Company continued to decrease its exposure to investor owned commercial real estate credits. For the full year, net loans declined $52.1 million, or 2.9%. Excluding the loans covered under loss share, Commercial & Industrial loans increased 7.2% during the year and represent more than 30% of the Company’s loan portfolio at December 31, 2010.

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Asset quality
Nonperforming loans, including troubled debt restructurings of $7.9 million, were $46.4 million at December 31, 2010 compared to $51.9 million for the linked third quarter and $38.5 million at December 31, 2009. During the quarter ended December 31, 2010, there were $19.7 million of additions, $7.9 million of chargeoffs, other principal reductions of $7.3 million, and $8.7 million of assets transferred to other real estate. Of the $19.7 million in new nonperforming loans, three relationships comprise over $14.1 million, or 72% of the total. Nonperforming loans represented 2.45% of total loans at December 31, 2010 versus 2.69% at September 30, 2010 and 2.10% at December 31, 2009.

Nonperforming loans by segment at December 31, 2010 were as follows (in millions):

	Total portfolio		Nonperforming		% NPL
Construction, Real Estate/Land
Acquisition & Development	$	190.3	$	9.9	5.20	%
Commercial Real Estate – investor owned		444.7		10.9	2.45	%
Commercial Real Estate – owner occupied		331.6		2.0	0.60	%
Residential Real Estate		189.5		12.3	6.49	%
Commercial & Industrial		593.9		11.3	1.90	%
Consumer & Other		16.4		---	0.00	%
Portfolio loans covered under FDIC loss share		126.7		---	0.00	%
Total	$	1,893.1	$	46.4	2.45	%

Loans that were 30-89 days delinquent at December 31, 2010 represented 0.13% of the portfolio compared with 0.09% at September 30, 2010.

Other real estate at December 31, 2010 was $36.2 million, compared to $34.7 million at September 30, 2010 and $25.1 million at December 31, 2009. Other real estate covered by FDIC loss share agreements increased by $3.1 million. Approximately 30% of total other real estate, or $10.8 million, is covered by two FDIC loss share agreements. Other real estate not covered by an FDIC loss share agreement totaled $25.4 million at December 31, 2010, a decrease of $1.6 million from September 30, 2010.

During the fourth quarter, the Company sold $9.7 million in other real estate, recording a loss of $355,000. During 2010, , the Company sold $26.0 million in other real estate at a net gain of $79,000.

Net charge-offs in the fourth quarter of 2010 were $7.6 million, or 1.57% of average loans. By comparison, net charge-offs were $5.9 million, or 1.23% of average loans, in the linked third quarter. For the year, net charge-offs were $34.0 million, or 1.83% of average loans.

Provision for loan losses was $3.3 million in the fourth quarter of 2010 compared to $7.7 million in the third quarter of 2010 and $8.4 million in the fourth quarter of 2009. The decrease in provision for loan losses in the fourth quarter was primarily due to lower levels of risk rating downgrades. Excluding the loans under FDIC loss share agreements, the Company’s watch list credits as a percentage of total loans have declined slightly since year end 2009.

The Company’s allowance for loan losses was 2.26% of total loans at December 31, 2010, representing 92% of nonperforming loans. The loan loss allowance was 2.43% at September 30, 2010 representing 90% of nonperforming loans and 2.35% at December 31, 2009 representing 112% of nonperforming loans.

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Net Interest Income
Net interest income for the banking segment increased $8.8 million, or 45%, in the fourth quarter of 2010 compared to the same period of 2009 and was $2.2 million, or 8.6%, higher than in the linked third quarter. For the full year, net interest income for the banking segment increased $18.5 million, or 25%, over 2009.

Loans covered under FDIC loss share yielded 20.6% in 2010. This yield benefited from cash flows on covered assets that exceeded expectations.

Including the effect of parent company debt, the net interest rate margin was 4.44% for the fourth quarter of 2010, compared to 4.31% for the third quarter of 2010 and 3.15% in the fourth quarter of 2009. Absent the purchased Home National loans, the fourth quarter net interest rate margin would have been 3.50%, a 0.17% decline from the linked third quarter due to a less favorable earning asset mix.

Wealth Management Segment

Fee income from the Wealth Management segment, including trust revenues and income from state tax credit brokerage activities, totaled $1.5 million in the fourth quarter of 2010, a 14.5% increase from the prior linked quarter, and 42% higher than the prior year period. For the year, fee income for the Wealth Management segment totaled $7.7 million, representing a 38% increase over 2009.

Trust
Trust revenues were $1.5 million in the fourth quarter of 2010, a 14% increase over the linked quarter and a 51% increase over the prior year period. For the year, trust revenues increased $919,000, or 20%, over 2009. The increase in revenue was attributable to higher account asset values, several estate planning-related insurance sales and generally improving sales momentum in the Trust organization.

Trust assets under administration were $1.5 billion at December 31, 2010, compared to $1.4 billion at September 30, 2010 and $1.3 billion at December 31, 2009.

State Tax Credit Brokerage
Including the impact of fair value marks on tax credit assets and related interest rate hedges, revenue from state tax credit brokerage activities was near breakeven for the fourth quarter of 2010, compared to $884,000 for the third quarter of 2010 and $62,000 in the fourth quarter of 2009. Tax credit sales in the fourth quarter of 2010 were lower than expected due to the timing of customer purchases. For the year, revenue from state tax credit brokerage activities was $2.3 million, a $1.2 million, or 117% increase over 2009.

Other Business Results

Total capital to risk-weighted assets was 14.30% at December 31, 2010 compared to 13.32% at December 31, 2009. The tangible common equity ratio was 5.26% at December 31, 2010 versus 5.44% at December 31, 2009. The decline in the tangible common equity ratio was primarily due to increased assets resulting from the $319 million increase in deposits. The effect of the anticipated asset increase of Legacy on our tangible common equity ratio is expected to be offset by our first quarter seasonal deposit runoff. A reconciliation of shareholders’ equity to tangible common equity and total assets to tangible assets is provided in the attached tables. The Company believes that the tangible common equity ratio is an important financial measure of capital strength even though it is considered to be a non-GAAP measure and is not part of the regulatory capital requirements to which the Company is subject.

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Other Income in 2010 was $3.1 million, or 220% higher than 2009. The increase in Other Income was due to $1.7 million of accretion on the FDIC indemnification asset, $776,000 of income on bank-owned life insurance policies and $524,000 related to two interest rate swaps terminated by the Company in 2009.

For the fourth quarter of 2010, noninterest expenses increased $4.9 million, or 36%, compared to the prior year period. The increase was primarily attributable to $900,000 in salaries and benefits, largely due to the recruitment of several senior bankers, higher variable compensation accruals, and staff additions to support our Arizona acquisition activity, $3.0 million in loan legal and other real estate expenses including $2.4 million of writedowns in other real estate, and the $750,000 accrual for a potential fraud loss on a depository account. Noninterest expenses were $3.2 million, or 20.8%, higher on a linked quarter basis. The increase primarily consists of various expenses including $1.6 million of loan legal and other real estate expenses, along with semi-annual director compensation payments, the fraud accrual and the reserve for unfunded commitments. Excluding the goodwill impairment charge in 2009, for the year, noninterest expenses increased $8.9 million, or 16.7% over 2009. Salaries and benefits rose $2.5 million, or 9.8%, year-over-year, while loan legal and other real estate expenses increased $5.2 million, year over year.

The Company’s efficiency ratio was 61.6% for the quarter ended December 31, 2010 compared to 62.0% for the prior year period. Excluding the goodwill impairment charge in 2009, the Company’s efficiency ratio for the full year of 2010 was 57.9%, compared to 59.3% in 2009.

Enterprise Financial Services Corp operates commercial banking and wealth management businesses in metropolitan St. Louis, Kansas City, and Phoenix. The Company is primarily focused on serving the needs of privately held businesses, their owner families, executives and professionals.

# # #

Readers should note that in addition to the historical information contained herein, this press release contains forward-looking statements, which are inherently subject to risks and uncertainties that could cause actual results to differ materially from those contemplated from such statements. We use the words “expect” and “intend” and variations of such words and similar expressions in this communication to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, burdens imposed by federal and state regulations of banks, credit risk, exposure to local and national economic conditions, risks associated with rapid increase or decrease in prevailing interest rates, effects of mergers and acquisitions, effects of critical accounting policies and judgments, legal and regulatory developments and competition from banks and other financial institutions, as well as other risk factors described in Enterprise Financial’s 2009 Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events.

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ENTERPRISE FINANCIAL SERVICES CORP
CONSOLIDATED FINANCIAL SUMMARY
(unaudited)

(In thousands, except per share data)	For the Quarter Ended						For the Twelve Months Ended

	Dec 31,			Dec 31,			Dec 31,			Dec 31,
INCOME STATEMENTS	2010			2009			2010			2009
NET INTEREST INCOME
Total interest income	$	34,433		$	28,013		$	120,450		$	118,486
Total interest expense		7,909			10,098			32,411			48,845
Net interest income		26,524			17,915			88,039			69,641
Provision for loan losses		3,325			8,400			33,735			40,412
Net interest income after provision for loan losses		23,199			9,515			54,304			29,229

NONINTEREST INCOME
Wealth Management revenue		1,518			1,002			5,443		$	4,524
Deposit service charges		1,145			1,221			4,739			5,012
Sale of other real estate		(355	)		(579	)		79			(436	)
State tax credit activity, net		(3	)		62			2,250			1,035
Sale of securities		781			3			1,987			955
Gain on extinguishment of debt		-			2,062			-			7,388
Other income		740			454			4,476			1,399
Total noninterest income		3,826			4,225			18,974			19,877

NONINTEREST EXPENSE
Salaries and benefits		7,517			6,617			28,513			25,969
Occupancy		1,126			1,189			4,297			4,709
Furniture and equipment		357			360			1,393			1,425
Goodwill impairment charge		-			-			-			45,377
Other		9,678			5,566			27,734			20,947
Total noninterest expense		18,678			13,732			61,937			98,427

Income (loss) from continuing operations before income tax		8,347			8			11,341			(49,321	)
Income tax expense (benefit)		1,921			(372	)		2,221			(2,650	)
Income (loss) from continuing operations		6,426			380			9,120			(46,671	)

(Loss) income from discontinued operations before income tax		-			(315	)		-			(408	)
Loss on disposal before income tax		-			(1,587	)		-			(1,587	)
Income tax benefit		-			(668	)		-			(711	)
Loss from discontinued operations		-			(1,234	)		-			(1,284	)

Net income (loss)		6,426			(854	)		9,120			(47,955	)
Dividends on preferred stock		(622	)		(608	)		(2,467	)		(2,414	)
Net income (loss) available to common shareholders	$	5,804		$	(1,462	)	$	6,653		$	(50,369	)

Basic earnings (loss) per share from continuing operations	$	0.39		$	(0.02	)	$	0.45		$	(3.82	)
Diluted earnings (loss) per share from continuing operations		0.38			(0.02	)		0.45			(3.82	)
Basic loss per share from discontinued operations		-			(0.10	)		-			(0.10	)
Diluted loss per share from discontinued operations		-			(0.10	)		-			(0.10	)
Basic earnings (loss) per share		0.39			(0.12	)		0.45			(3.92	)
Diluted earnings (loss) per share		0.38			(0.12	)		0.45			(3.92	)

Return on average assets		0.87%			(0.24%	)		0.27%			(2.05%	)
Return on average common equity		14.95%			(4.25%	)		4.50%			(34.51%	)
Efficiency ratio from continuing operations		61.55%			62.02%			57.88%			109.95%
Noninterest expense from continuing operations to average assets		2.80%			2.26%			2.52%			4.00%

YIELDS (fully tax equivalent)
Loans not covered under FDIC loss share		5.45%			5.55%			5.52%			5.45%
Loans covered under FDIC loss share		24.82%			3.05%			20.60%			3.05%
Total portfolio loans		6.75%			5.54%			6.11%			5.45%
Securities		2.60%			2.78%			2.74%			3.35%
Federal funds sold		0.26%			0.20%			0.30%			0.22%
Yield on earning assets		5.75%			4.89%			5.37%			5.15%
Interest-bearing deposits		1.21%			1.72%			1.36%			1.94%
Subordinated debt		5.71%			5.80%			5.82%			6.08%
Borrowed funds		2.32%			3.19%			2.46%			3.49%
Cost of paying liabilities		1.49%			2.06%			1.66%			2.41%
Net interest spread		4.26%			2.83%			3.71%			2.74%
Net interest rate margin		4.44%			3.15%			3.94%			3.06%

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

(In thousands)			At the Quarter Ended

	Dec 31,		Sep 30,		Jun 30,		Mar 31,		Dec 31,
BALANCE SHEETS	2010		2010		2010		2010		2009
ASSETS
Cash and due from banks	$	23,413	$	21,125	$	13,711	$	13,548	$	16,064
Federal funds sold		3,153		1,599		30		2,199		7,472
Interest-bearing deposits		268,853		35,588		66,347		125,822		83,430
Debt and equity investments		373,824		274,855		273,021		280,329		295,650
Loans held for sale		5,640		5,910		2,518		1,517		4,243

Portfolio loans not covered under FDIC loss share		1,766,351		1,796,637		1,760,461		1,786,097		1,818,481
Portfolio loans covered under FDIC loss share		126,711		134,207		11,776		13,127		13,644
Total portfolio loans		1,893,062		1,930,844		1,772,237		1,799,224		1,832,125
Less allowance for loan losses		42,759		46,999		45,258		44,079		42,995
Net loans		1,850,303		1,883,845		1,726,979		1,755,145		1,789,130

Other real estate not covered under FDIC loss share		25,373		26,937		23,606		18,669		22,918
Other real estate covered under FDIC loss share		10,835		7,748		2,279		2,279		2,166
Premises and equipment, net		20,499		21,024		21,169		21,697		22,301
State tax credits, held for sale		61,148		61,007		60,134		52,067		51,258
FDIC loss share receivable		88,292		88,676		5,922		10,563		10,368
Goodwill		2,064		2,064		2,064		2,064		2,064
Core deposit intangible		1,223		1,322		1,423		1,531		1,643
Assets held for sale		-		-		-		-		4,000
Other assets		71,220		72,544		73,526		73,975		52,948
Total assets	$	2,805,840	$	2,504,244	$	2,272,729	$	2,361,405	$	2,365,655

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits		366,086		304,221		293,619		300,835		289,658
Interest-bearing deposits		1,931,635		1,735,649		1,528,204		1,603,219		1,651,758
Total deposits		2,297,721		2,039,870		1,821,823		1,904,054		1,941,416
Subordinated debentures		85,081		85,081		85,081		85,081		85,081
FHLB advances		107,300		122,300		123,100		128,100		128,100
Federal funds purchased		-		5,000		-		-		-
Other borrowings		119,333		58,196		56,681		60,438		39,338
Other liabilities		13,057		13,217		9,172		8,498		7,808
Total liabilities		2,622,492		2,323,664		2,095,857		2,186,171		2,201,743
Shareholders' equity		183,348		180,580		176,872		175,234		163,912
Total liabilities and shareholders' equity	$	2,805,840	$	2,504,244	$	2,272,729	$	2,361,405	$	2,365,655

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

(In thousands, except per share data)	For the Quarter Ended

	Dec 31,		Sep 30,		Jun 30,		Mar 31,			Dec 31,
	2010		2010		2010		2010			2009
EARNINGS SUMMARY
Net income (loss) from continuing operations
Net interest income	$	26,524		24,290	$	18,602	$	18,623		$	17,914
Provision for loan losses		3,325		7,650		8,960		13,800			8,400
Wealth Management revenue		1,518		1,326		1,302		1,297			1,002
Noninterest income		2,308		4,725		3,739		2,759			3,223
Noninterest expense		18,678		15,458		14,146		13,655			13,731
Income (loss) before income tax		8,347		7,233		537		(4,776	)		8
Net income (loss) from continuing operations		6,426		4,971		737		(3,014	)		380

Net loss from discontinued operations	$	-	$	-	$	-	$	-		$	(1,234	)
Net income (loss) available to common shareholders	$	5,804	$	4,353	$	122	$	(3,626	)	$	(1,462	)
Diluted earnings (loss) per common share	$	0.38	$	0.29	$	0.01	$	(0.25	)	$	(0.12	)
Return on average common equity		14.95%		11.61%		0.34%		(10.26%	)		(4.25%	)
Net interest rate margin (fully tax equivalent)		4.44%		4.31%		3.46%		3.47%			3.15%
Efficiency ratio from continuing operations		61.55%		50.95%		59.84%		60.21%			62.02%

MARKET DATA
Book value per common share	$	10.13	$	9.98	$	9.74	$	9.65		$	10.25
Tangible book value per common share	$	9.91	$	9.75	$	9.51	$	9.40		$	9.97
Market value per share	$	10.46	$	9.30	$	9.64	$	11.06		$	7.71
Period end common shares outstanding		14,889		14,854		14,854		14,852			12,883
Average basic common shares		14,856		14,854		14,854		14,418			12,835
Average diluted common shares		16,296		16,293		14,855		14,418			12,835

ASSET QUALITY
Net charge-offs	$	7,564	$	5,909	$	7,781	$	12,716		$	9,041
Nonperforming loans	$	46,357	$	51,955	$	46,550	$	55,785		$	38,540
Nonperforming loans to total loans		2.45%		2.69%		2.63%		3.10%			2.10%
Nonperforming assets to total assets*		2.59%		3.18%		3.12%		3.19%			2.60%
Allowance for loan losses to total loans		2.26%		2.43%		2.55%		2.45%			2.35%
Net charge-offs to average loans (annualized)		1.57%		1.23%		1.76%		2.83%			1.90%

CAPITAL
Average common equity to average assets		5.83%		5.96%		6.18%		6.14%			5.67%
Tier 1 capital to risk-weighted assets		11.97%		11.80%		11.93%		11.78%			10.67%
Total capital to risk-weighted assets		14.30%		14.19%		14.41%		14.29%			13.32%
Tangible common equity to tangible assets		5.26%		5.79%		6.22%		5.92%			5.44%

AVERAGE BALANCES
Portfolio loans not covered under FDIC loss share	$	1,780,890	$	1,764,289	$	1,762,250	$	1,807,255		$	1,882,675
Portfolio loans covered under FDIC loss share		128,412		135,204		12,313		13,012			4,936
Earning assets		2,394,683		2,260,308		2,186,375		2,206,302			2,295,474
Total assets		2,644,952		2,494,148		2,342,523		2,336,788			2,406,403
Deposits		2,169,853		2,008,720		1,889,947		1,895,937			1,926,800
Shareholders' equity		186,453		180,984		176,785		175,223			168,143

LOAN PORTFOLIO
Commercial and industrial	$	593,938	$	592,554	$	545,177	$	551,351		$	553,988
Commercial real estate		776,268		792,510		793,869		799,846			817,332
Construction real estate		190,285		201,298		205,501		213,253			221,397
Residential real estate		189,484		195,762		198,096		204,544			209,743
Consumer and other		16,376		14,513		17,818		17,103			16,021
Portfolio loans covered under FDIC loss share		126,711		134,207		11,776		13,127			13,644
Total loan portfolio	$	1,893,062	$	1,930,844	$	1,772,237	$	1,799,224		$	1,832,125

DEPOSIT PORTFOLIO
Noninterest-bearing accounts	$	366,086	$	304,221	$	293,619	$	300,835		$	289,658
Interest-bearing transaction accounts		204,687		187,426		198,747		203,006			142,061
Money market and savings accounts		865,703		714,498		687,116		640,504			699,374
Certificates of deposit		861,245		833,725		642,341		759,709			810,323
Total deposit portfolio	$	2,297,721	$	2,039,870	$	1,821,823	$	1,904,054		$	1,941,417

*Excludes ORE covered by FDIC loss share agreements, except for their inclusion in total assets.

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

(In thousands, except per share data)	For the Quarter Ended

	Dec 31,		Sep 30,		Jun 30,		Mar 31,		Dec 31,
	2010		2010		2010		2010		2009
YIELDS (fully tax equivalent)
Loans not covered under FDIC loss share		5.45%		5.49%		5.56%		5.59%		5.55%
Loans covered under FDIC loss share		24.82%		17.48%		14.48%		16.94%		3.05%
Total portfolio loans		6.75%		6.34%		5.62%		5.67%		5.54%
Securities		2.60%		2.75%		2.85%		2.76%		2.78%
Federal funds sold		0.26%		0.30%		0.31%		0.36%		0.20%
Yield on earning assets		5.75%		5.67%		4.95%		5.06%		4.89%
Interest-bearing deposits		1.21%		1.24%		1.44%		1.56%		1.72%
Subordinated debt		5.71%		5.88%		5.84%		5.86%		5.80%
Borrowed funds		2.32%		2.29%		2.55%		2.74%		3.19%
Cost of paying liabilities		1.49%		1.54%		1.75%		1.87%		2.06%
Net interest spread		4.26%		4.13%		3.20%		3.18%		2.83%
Net interest rate margin		4.44%		4.31%		3.46%		3.47%		3.15%

WEALTH MANAGEMENT
Trust Assets under management	$	812,104	$	741,929	$	722,895	$	773,069	$	750,755
Trust Assets under administration		1,498,987		1,371,214		1,230,827		1,320,714		1,279,971

RECONCILIATION OF U.S. GAAP FINANCIAL MEASURES

PRE-TAX INCOME (LOSS) FROM CONTINUING OPERATIONS TO PRE-TAX, PRE-PROVISION INCOME FROM CONTINUING OPERATIONS

	For the Quarter Ended

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)	2010			2010			2010			2010			2009
Pre-tax income (loss) from continuing operations	$	8,347		$	7,233		$	537		$	(4,776	)	$	8
Sales and fair value writedowns of other real estate		2,683			1,606			678			586			1,166
Sale of securities		(781	)		(124	)		(525	)		(557	)		(3	)
Gain on extinguishment of debt		-			-			-			-			(2,062	)
Income (loss) before income tax		10,249			8,715			690			(4,747	)		(891	)
Provision for loan losses		3,325			7,650			8,960			13,800			8,400
Pre-tax, pre-provision income from continuing operations	$	13,574		$	16,365		$	9,650		$	9,053		$	7,509

SHAREHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY AND TOTAL ASSETS TO TANGIBLE ASSETS

	For the Quarter Ended

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(In thousands)	2010			2010			2010			2010			2009
Shareholders' equity	$	183,348		$	180,580		$	176,872		$	175,234		$	163,912
Less: Preferred stock		(32,519	)		(32,334	)		(32,153	)		(31,976	)		(31,802	)
Less: Goodwill		(2,064	)		(2,064	)		(2,064	)		(2,064	)		(2,064	)
Less: Intangible assets		(1,223	)		(1,322	)		(1,423	)		(1,531	)		(1,643	)
Tangible common equity	$	147,542		$	144,860		$	141,232		$	139,663		$	128,403

Total assets	$	2,805,840		$	2,504,244		$	2,272,729		$	2,361,405		$	2,365,655
Less: Goodwill		(2,064	)		(2,064	)		(2,064	)		(2,064	)		(2,064	)
Less: Intangible assets		(1,223	)		(1,322	)		(1,423	)		(1,531	)		(1,643	)
Tangible assets	$	2,802,554		$	2,500,858		$	2,269,242		$	2,357,810		$	2,361,948

Tangible common equity to tangible assets		5.26%			5.79%			6.22%			5.92%			5.44%

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