Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - ENTERPRISE FINANCIAL SERVICES CORP | ex991pressrelease101116.htm |
| EX-2.1 - EXHIBIT 2.1 - ENTERPRISE FINANCIAL SERVICES CORP | ex21mergeragreement101016.htm |
| 8-K - 8-K - ENTERPRISE FINANCIAL SERVICES CORP | a2016-10announcement.htm |
ACQUISITION OF JEFFERSON COUNTY BANCSHARES, INC.
OCTOBER 11, 2016
ENTERPRISE FINANCIAL SERVICES CORP
NASDAQ: EFSC
1
SAFE HARBOR STATEMENT
FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS PRESENTATION MAY BE CONSIDERED FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS MAY INCLUDE:
STATEMENTS REGARDING THE MERGER, THE RANGE OF CONSIDERATION OF THE MERGER AND THE ABILITY OF THE PARTIES TO CONSUMMATE THE MERGER. 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. EFSC DOES NOT ASSUME ANY DUTY AND DOES NOT UNDERTAKE TO
UPDATE FORWARD-LOOKING STATEMENTS. BECAUSE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO ASSUMPTIONS AND UNCERTAINTIES, ACTUAL RESULTS OR FUTURE
EVENTS COULD DIFFER, POSSIBLY MATERIALLY, FROM THOSE THAT EFSC ANTICIPATED IN ITS FORWARD-LOOKING STATEMENTS AND FUTURE RESULTS COULD DIFFER
MATERIALLY FROM HISTORICAL PERFORMANCE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE POSSIBILITY:
THAT EXPECTED BENEFITS MAY NOT MATERIALIZE IN THE TIMEFRAME EXPECTED OR AT ALL, OR MAY BE MORE COSTLY TO ACHIEVE; THAT THE TRANSACTION MAY NOT BE
TIMELY COMPLETED, IF AT ALL; THAT PRIOR TO THE COMPLETION OF THE TRANSACTION OR THEREAFTER, EFSC’S RESPECTIVE BUSINESSES MAY NOT PERFORM AS EXPECTED
DUE TO TRANSACTION-RELATED UNCERTAINTY OR OTHER FACTORS; THAT THE PARTIES ARE UNABLE TO SUCCESSFULLY IMPLEMENT INTEGRATION STRATEGIES; THAT REQUIRED
REGULATORY, SHAREHOLDER OR OTHER APPROVALS ARE NOT OBTAINED OR OTHER CLOSING CONDITIONS ARE NOT SATISFIED IN A TIMELY MANNER OR AT ALL; REPUTATIONAL
RISKS AND THE REACTION OF THE COMPANIES’ CUSTOMERS TO THE TRANSACTION; DIVERSION OF MANAGEMENT TIME ON MERGER-RELATED ISSUES; AND THOSE FACTORS AND
RISKS REFERENCED FROM TIME TO TIME IN EFSC’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FOR ANY FORWARD-LOOKING STATEMENTS MADE IN THIS
PRESENTATION 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.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
IN CONNECTION WITH THE PROPOSED MERGER TRANSACTION, EFSC WILL FILE WITH THE SECURITIES AND EXCHANGE COMMISSION A REGISTRATION STATEMENT ON FORM
S-4 THAT WILL INCLUDE A PROXY STATEMENT OF JCB, AND A PROSPECTUS OF EFSC, AS WELL AS OTHER RELEVANT DOCUMENTS CONCERNING THE PROPOSED
TRANSACTION. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION.
A FREE COPY OF THE PROXY STATEMENT/PROSPECTUS, AS WELL AS OTHER FILINGS CONTAINING INFORMATION ABOUT EFSC AND JCB, MAY BE OBTAINED AT THE SEC’S
INTERNET SITE (HTTP://WWW.SEC.GOV).
EFSC AND JCB AND CERTAIN OF THEIR DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE
SHAREHOLDERS OF JCB IN CONNECTION WITH THE PROPOSED MERGER. INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE OFFICERS OF EFSC IS SET FORTH IN THE
PROXY STATEMENT FOR EFSC’S 2016 ANNUAL MEETING OF SHAREHOLDERS, AS FILED WITH THE SEC ON A SCHEDULE 14A ON MARCH 16, 2016. ADDITIONAL INFORMATION
REGARDING THE INTERESTS OF THOSE PARTICIPANTS AND OTHER PERSONS WHO MAY BE DEEMED PARTICIPANTS IN THE TRANSACTION MAY BE OBTAINED BY READING THE
PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE. FREE COPIES OF THIS DOCUMENT MAY BE OBTAINED AS DESCRIBED IN
THE PRECEDING PARAGRAPH.
2 SOURCE: SNL FINANCIAL
EFSC (16 BRANCHES TOTAL, 6 BRANCHES IN ST. LOUIS MSA)
JEFFERSON (18 BRANCHES TOTAL, 17 BRANCHES IN ST. LOUIS MSA)
ST. LOUIS MSA
STRATEGIC, IN-MARKET ACQUISITION OF JEFFERSON COUNTY BANCSHARES,
INC. (“JEFFERSON”) BY ENTERPRISE FINANCIAL SERVICES CORP (“EFSC”)
CONSISTENT WITH M&A EXPANSION STRATEGY
MERGER PARTNER WITH EXPERIENCED BANKERS
AND PROFESSIONALS
DISCIPLINED FINANCIAL TERMS
WELL KNOWN MARKET
EXTENSIVE DUE DILIGENCE
ENHANCES EFSC’S FOOTPRINT IN THE ST.
LOUIS MSA, WHILE BUILDING TOTAL BALANCE
SHEET SIZE TO ALMOST $5 BILLION IN PRO
FORMA ASSETS
TOP FOUR DEPOSIT MARKET SHARE IN
THE ST. LOUIS MSA
EXPANDS BRANCH PRESENCE
~$3 BILLION OF DEPOSITS
STRENGTHENS & DIVERSIFIES
CORE DEPOSIT GATHERING
CAPABILITIES
ATTRACTIVE BRANCH SIZES
MO
3
TRANSACTION SNAPSHOT
(1)
TRANSACTION
VALUE (1)
(1) BASED ON JEFFERSON’S 1,472,853 COMMON SHARES OUTSTANDING, 108,295 OPTIONS OUTSTANDING WITH A WAEP OF $54.72 AND EFSC’S 15-DAY VWAP OF $31.52
AS OF OCTOBER 10, 2016; ASSUMES ALL STOCK OPTIONS ARE CASHED OUT AT CLOSING
(2) ACCRETION AS COMPARED TO EFSC ANALYST CONSENSUS EPS ESTIMATES
CONSIDERATION
~ 3.5% EPS ACCRETION IN PARTIAL YEAR 2017 (2), EXCLUDING ONE-TIME CHARGES
~ 7.4% EPS ACCRETION IN 2018 (2)
~ 3.6% DILUTION TO TBVPS AT CLOSING
TBVPS DILUTION EARN-BACK PERIOD LESS THAN 3.25 YEARS
ESTIMATED
FINANCIAL IMPACT
APPROXIMATELY $130.6 MILLION TRANSACTION VALUE
3,300,000 MILLION EFSC COMMON SHARES ISSUED TO JEFFERSON SHAREHOLDERS
APPROXIMATELY $26.6 MILLION IN CASH PAID, INCLUDING CASH-OUT VALUE OF
JEFFERSON STOCK OPTIONS
CONSIDERATION MIX TO JEFFERSON SHAREHOLDERS OF ~ 81.5% STOCK, ~ 18.5% CASH
PRICE / TBVPS OF 140.7%
PRICE / LTM JUNE 2016 EPS OF 19.8X
PRICE / LTM JUNE 2016 EPS INCLUDING FULLY-PHASED COST SAVINGS OF 10.9X
TRANSACTION VALUE
& CONSIDERATION (1)
4
OVERVIEW OF JEFFERSON
JEFFERSON COUNTY BANCSHARES, INC.
ESTABLISHED IN 1911; ONE OF THE OLDEST
COMMUNITY BANKS IN THE REGION
WELL RUN, TRADITIONAL COMMUNITY BANK
17 BRANCH LOCATIONS THROUGHOUT THE ST. LOUIS
MSA AND 1 BRANCH IN PERRYVILLE, MO (1)
AVG. DEPOSITS PER BRANCH OF ~$63 MILLION (2)
COMMERCIALLY-FOCUSED LENDING PRACTICE
JEFFERSON HAS DEMONSTRATED DISCIPLINED
BALANCE SHEET GROWTH IN RECENT YEARS
5-YEAR LOAN CAGR OF 3.9%
5-YEAR DEPOSIT CAGR OF 2.8%
JEFFERSON HAS BEEN CONSISTENTLY PROFITABLE
NET INCOME OF $7.7 MILLION FOR THE TWELVE
MONTHS ENDED JUNE 30, 2016
LTM ROAA OF 0.85%
FINANCIAL HIGHLIGHTS (3)
(1) COMPRISED OF 13 FULL-SERVICE BRANCHES, 4 MOBILE, LIMITED-SERVICE BRANCHES AND 1 OTHER LOCATION
(2) REPRESENTS THE AVERAGE DEPOSITS PER BRANCH FOR THE 13 FULL-SERVICE BRANCH LOCATIONS ONLY, AS OF JUNE 30, 2016
(3) BANK LEVEL DATA FOR JEFFERSON; AS OF AND FOR THE TWELVE MONTH PERIOD ENDED JUNE 30, 2016
SOURCE: SNL FINANCIAL
Dollar Values in Millions
Total Assets $928
Gross Loans $670
Deposits $766
Gross Loans / Deposits 87%
ROAA 0.85%
ROAE 7.67%
Net Interest Margin 3.53%
Efficiency Ratio 64.4%
NPAs / Assets 2.90%
5
TRANSACTION RATIONALE
MATERIALLY ACCRETIVE TO EPS IN 2017 AND FORWARD YEAR EARNINGS
MODEST TBVPS DILUTION; EARNED BACK IN SLIGHTLY OVER THREE YEARS
STRONG PRO FORMA CAPITAL RATIOS SUPPORT FUTURE GROWTH AND EXPANSION
INTERNAL RATE OF RETURN OF 19.7%, CONSISTENT WITH MANAGEMENT OBJECTIVES
TRANSACTION STRUCTURED TO PROVIDE CERTAINTY TO EFSC SHAREHOLDERS WITH
REGARD TO FIXED NUMBER OF SHARES ISSUED AND FIXED AMOUNT OF CASH PAID
FINANCIALLY
ATTRACTIVE
COMPREHENSIVE DUE DILIGENCE PROCESS COMPLETED, INCLUDING AN EXTENSIVE
AND HIGHLY TRANSPARENT CREDIT REVIEW COVERING 80% OF JEFFERSON’S PORTFOLIO
CONSERVATIVE CREDIT MARK OF 4%; IDENTIFIED AND ACHIEVABLE COST SAVINGS OF 29.9%
IN-MARKET TRANSACTION WITH EXTENSIVE LOCAL KNOWLEDGE
INTEGRATION RISK IS OFFSET BY RETENTION OF KEY JEFFERSON MANAGEMENT AS WELL AS
PRIOR EFSC ACQUISITION EXPERIENCE
LOW
EXECUTION RISK
CONSISTENT WITH EFSC’S EXPANSION STRATEGY
SIGNIFICANTLY ACCELERATES ST. LOUIS MARKET EXPANSION AND LEVERAGES EXISTING
TEAM OF EXPERIENCED BANKERS AND IN-MARKET RESOURCES
ADDS VALUABLE SCALE AND OPERATING LEVERAGE IN LARGEST MARKET
REVENUE SYNERGIES COULD PROVIDE ENHANCED BENEFITS NOT CURRENTLY MODELED
STRATEGICALLY
COMPELLING
6
(1) COMMUNITY BANKS DEFINED AS INSTITUTIONS HAVING LESS THAN $10 BILLION IN DEPOSITS
SOURCE: SNL FINANCIAL, FDIC; DEPOSIT DATA AS OF JUNE 30, 2016
STRENGTHENS EFSC’S ALREADY SIGNIFICANT ST.
LOUIS FOOTPRINT
PRO FORMA DEPOSITS IN EXCESS OF $2.9 BILLION
CREATES THE LARGEST COMMUNITY BANK BY DEPOSITS IN
THE ST. LOUIS MSA (1)
TOP 4 PRO FORMA DEPOSIT MARKET SHARE
EFSC IS THE SECOND LARGEST COMMUNITY BANK BY
DEPOSITS IN MISSOURI (1)
PRO FORMA DEPOSITS IN EXCESS OF $3.1 BILLION
STATEWIDE DEPOSIT MARKET SHARE RANK TO #6
MISSOURI ST. LOUIS MSA
June '16
Total Market
# of Deposits Share
Rank Institution Branches ($000) (%)
1 U.S. Bancorp (MN) 235 17,351,269 12.36
2 Bank of America Corp. (NC) 81 15,479,896 11.03
3 Commerce Bancshares Inc. (MO) 114 14,648,091 10.43
4 UMB Financial Corp. (MO) 52 11,464,627 8.17
5 Central Bancompany Inc. (MO) 125 8,147,263 5.80
6 Pro Forma Company 26 3,103,635 2.21 %
6 EFSC 8 2,337,334 1.66 %
7 Great Southern Bancorp Inc. (MO) 71 2,284,048 1.63
8 Regions Financial Corp. (AL) 62 2,271,517 1.62
9 PNC Financial Services Group (PA) 39 2,163,914 1.54
10 First Banks Inc. (MO) 46 1,910,547 1.36
11 National Bank Holdings Corp. (CO) 31 1,735,745 1.24
12 First State Bancshares Inc. (MO) 51 1,707,262 1.22
13 Stupp Bros. Inc. (MO) 21 1,449,099 1.03
14 Arvest Bank Group Inc. (AR) 44 1,271,314 0.91
15 Bank of Montreal 21 1,258,282 0.90
16 NASB Financial Inc. (MO) 11 1,243,998 0.89
17 First Busey Corp. (IL) 13 1,189,821 0.85
18 Landrum Co. (MO) 17 1,181,649 0.84
19 Reliable Community Bcshs Inc. (MO) 22 1,016,055 0.72
20 Hawthorn Bancshares Inc. (MO) 23 1,011,230 0.72
Top 20 Institutions 1,087 91,122,961 64.92
26 JEFFERSON 18 766,301 0.55 %
Total for Institutions in Market 2,436 140,392,492 100.00 %
June '15
Total Market
# of Deposits Share
Rank Institution Branches ($000) (%)
1 U.S. Bancorp (MN) 117 13,440,724 19.26
2 Bank of America Corp. (NC) 53 11,264,321 16.15
3 Commerce Bancshares Inc. (MO) 50 6,450,739 9.25
4 Pro Forma Company 23 2,980,987 4.28 %
4 Regions Financial Corp. (AL) 64 2,761,735 3.96
5 EFSC 6 2,271,986 3.26 %
6 PNC Financial Services Group (PA) 44 2,231,254 3.20
7 First Banks Inc. (MO) 52 2,187,788 3.14
8 Banc Ed Corp. (IL) 20 1,533,999 2.20
9 Stupp Bros. Inc. (MO) 21 1,449,099 2.08
10 Central Bancompany Inc. (MO) 15 1,310,776 1.88
11 UMB Financial Corp. (MO) 16 1,288,303 1.85
12 First Busey Corp. (IL) 13 1,189,821 1.71
13 Bank of Montreal 16 1,151,536 1.65
14 First Co Bancorp Inc. (IL) 16 1,081,209 1.55
15 Midland States Bancorp Inc. (IL) 20 1,060,598 1.52
16 Reliance Bancshares Inc. (MO) 20 917,596 1.32
17 CBX Corp. (IL) 8 825,966 1.18
18 JEFFERSON 17 709,001 1.02 %
19 Cass Information Systems (MO) 4 651,214 0.93
20 First Mid-Il l inois Bancshares (IL) 10 597,400 0.86
Top 20 Institutions 582 54,375,065 77.97
Total for Institutions in Market 903 69,769,443 100.00 %
7
SIMILARLY ATTRACTIVE DEPOSIT MAKE-UP AND COST
(1)
(1) BANK LEVEL DATA AS OF JUNE 30, 2016
(2) SIMPLE SUMMATION OF JUNE 30, 2016 DEPOSIT DATA; EXCLUDES PURCHASE ACCOUNTING ADJUSTMENTS
SOURCE: SNL FINANCIAL
JEFFERSON’S DESIRABLE DEPOSIT MIX ENHANCES COMBINED CORE FUNDING CAPABILITIES
EXPANDED BRANCH NETWORK PROVIDES PLATFORM FOR CONTINUED ST. LOUIS MSA DEPOSIT GROWTH
Q2 ‘16 Cost of Deposits: 0.35% Q2 ‘16 Cost of Deposits: 0.42% Combined Cost of Deposits: 0.36%
EFSC (1) JEFFERSON (1) COMBINED (2)
25.0%
57.8%
17.2% 20.1%
60.2%
19.7%
24.0%
58.3%
17.7%
Deposits ($000)
Non-Interest Bearing 758,642
Int. Bearing Trans & Svgs. 1,752,053
Time Deposits 522,030
3,032,725
57.8%
Deposits ($000)
Non-Interest Bearing 154,109
Int. Bearing Trans & Svgs. 461,453
Time Deposits 150,739
766,301
60.2%
Deposits ($000)
Non-Interest Bearing 912,751
Int. Bearing Trans & Svgs. 2,213,506
Time Deposits 672,769
3,799,026
58.3%
8
Loans ($000)
Construction & Land 272,437
1-4 Family 367,724
Multifamily 89,220
CRE - Income Producing 638,913
CRE - Owner Occupied 438,927
C&I 1,591,582
Consumer & Other 221,228
3,620,031
12.1%
Loans ($000)
Construction & Land 95,136
1-4 Family 131,853
Multifamily 36,305
CRE - Income Producing 205,787
CRE - Owner Occupied 99,697
C&I 47,627
Consumer & Other 53,519
669,924
Loans ($000)
Construction & Land 177,301
1-4 Family 235,871
Multifamily 52,915
CRE - Income Producing 433,126
CRE - Owner Occupied 339,230
C&I 1,543,955
Consumer & Other 167,709
2,950,107
DIVERSIFIED LOAN PORTFOLIO, WITH STRENGTH IN C&I AND CRE
(1) BANK LEVEL DATA AS OF JUNE 30, 2016
(2) SIMPLE SUMMATION OF JUNE 30, 2016 LOAN DATA; EXCLUDES PURCHASE ACCOUNTING ADJUSTMENTS
SOURCE: SNL FINANCIAL
(1)
JEFFERSON’S SOLID CRE PORTFOLIO IN THE ST. LOUIS MSA MESHES WELL WITH EFSC’S C&I FOCUS
CRE AND ADC CONCENTRATION LEVELS REMAIN ATTRACTIVE
EFSC (1) JEFFERSON (1) COMBINED (2)
6.0%
8.0%
1.8%
14.7%
11.5%
52.3%
5.7%
14.2%
19.7%
5.4%
30.7%
14.9%
7.1%
8.0% 7.5%
10.2%
2.5%
17.6%
12.1%
44.0%
6.1%
CRE / Total Risk-Based Capital
ADC / Total Risk-Based Capital
178%
41%ADC / Total Risk-Based Capital
295%
92%
CRE / Total Risk-Based CapitalCRE / Total Risk-Based Capital
ADC / Total Risk-Based Capital
200%
51%
9
JEFFERSON’S EXPANDED COMMERCIAL AND RETAIL CUSTOMER BASES ARE COMPLEMENTARY TO
EFSC’S EXISTING PRODUCT SETS
POTENTIAL FINANCIAL BENEFITS OF FUTURE FEE INCOME OPPORTUNITIES ARE NOT INCLUDED IN
TRANSACTION MODELING
FEE INCOME OPPORTUNITIES (1)
(1) REPRESENT ILLUSTRATIVE AREAS OF POTENTIAL FEE INCOME ENHANCEMENT; POTENTIAL REVENUE ENHANCEMENTS NOT INCLUDED IN ESTIMATES OF FINANCIAL IMPACT PROVIDED HEREIN
WEALTH
MANAGEMENT
CARD
SERVICES
JEFFERSON’S GREATER RETAIL FOCUS AND
DISTRIBUTION PLATFORM PROVIDE OPPORTUNITIES
TO ENHANCE REVENUE THROUGH EXISTING EFSC
PRODUCTS AND SERVICES
TREASURY
MANAGEMENT
EFSC’S HIGHLY COMPETITIVE TREASURY
MANAGEMENT SUITE AFFORDS ADDITIONAL
REVENUE OPPORTUNITIES TO EXISTING AND
FUTURE JEFFERSON COMMERCIAL CUSTOMERS
MORTGAGE
10
TRANSACTION STRUCTURE AND VALUE
(1)
$130.6 MILLION
BLENDED PRICE PER SHARE OF $86.44
PRICE / Q2’16 TANGIBLE BOOK VALUE: 140.7%
PRICE / LTM JUNE 2016 EPS: 19.8X
PRICE / LTM JUNE 2016 EPS INCLUDING FULLY-PHASED IN COST SAVINGS: 10.9X
TRANSACTION
VALUE (1)
(1) BASED ON JEFFERSON’S 1,472,853 COMMON SHARES OUTSTANDING, 108,295 OPTIONS OUTSTANDING WITH A WAEP OF $54.72 AND EFSC’S 15-DAY VWAP OF $31.52
AS OF OCTOBER 10, 2016; ASSUMES ALL STOCK OPTIONS ARE CASHED OUT AT CLOSING
81.5% OF JEFFERSON COMMON SHARES RECEIVE STOCK CONSIDERATION;
18.5% OF JEFFERSON COMMON SHARES RECEIVE CASH CONSIDERATION
FIXED NUMBER OF EFSC COMMON SHARES OF 3,300,000 ISSUED TO JEFFERSON
COMMON SHARES RECEIVING STOCK; FIXED EXCHANGE RATIO OF 2.75 EFSC
SHARES ISSUED FOR EACH JEFFERSON SHARE RECEIVING STOCK CONSIDERATION
FIXED AMOUNT OF CASH OF APPROXIMATELY $26.6 MILLION PAID, INCLUDING THE
CASH-OUT OF UNEXERCISED JEFFERSON STOCK OPTIONS
CONSIDERATION
JEFFERSON TO MERGE WITH AND INTO EFSC
EAGLE BANK & TRUST COMPANY OF MISSOURI TO MERGE WITH AND INTO
ENTERPRISE BANK & TRUST
TRANSACTION
STRUCTURE
11
NO REVENUE SYNERGIES ASSUMED
REVENUE
SYNERGIES
PURCHASE
ACCOUNTING
ADJUSTMENTS
(4.0)% CREDIT MARK TO LOAN PORTFOLIO EQUATING TO $27.9 MILLION
(6.8)% MARK ON FIXED ASSETS EQUATING TO $1.5 MILLION
CORE DEPOSIT INTANGIBLE OF $10.3 MILLION AMORTIZED SYD OVER 10 YEARS
COST
SAVINGS
29.9% COST SAVINGS, ANNUAL PRE-TAX RUN-RATE OF APPROXIMATELY $8.0 MILLION
63% OF EFFICIENCIES REALIZED IN YEAR ONE, 100% ANNUALLY THEREAFTER
MERGER RELATED
CHARGES
PRE-TAX, ONE-TIME TRANSACTIONS COSTS OF APPROXIMATELY $10 MILLION
30% REALIZED PRIOR TO CLOSING, 70% POST CLOSING
KEY TRANSACTION ASSUMPTIONS
EXPECTED
TIMING
TRANSACTION CLOSE IN Q1 2017, SYSTEMS CONVERSION ANTICIPATED IN Q2 2017
CUSTOMARY REGULATORY AND JEFFERSON SHAREHOLDER APPROVALS REQUIRED
EFSC SHAREHOLDER APPROVAL NOT REQUIRED
JEFFERSON
LEADERSHIP
CEO OF JEFFERSON, MICHAEL W. WALSH, TO SERVE ON ENTERPRISE BANK
& TRUST SENIOR MANAGEMENT TEAM AND BANK-LEVEL BOARD OF DIRECTORS
JEFFERSON WILL BE GIVEN ONE BOARD SEAT ON THE EFSC BOARD OF DIRECTORS
12
~ 3.5% ACCRETIVE IN PARTIAL YEAR 2017
~ 7.4% ACCRETIVE IN 2018
EPS IMPACT (1)
TANGIBLE BOOK
VALUE PER SHARE
IMPACT
~ 3.6% DILUTION TO TANGIBLE BOOK VALUE PER SHARE AT CLOSE
TBVPS DILUTION EARN-BACK PERIOD LESS THAN 3.25 YEARS (2)
PRO FORMA
CONSOLIDATED
CAPITAL RATIOS (3)
~ 8.5% TANGIBLE COMMON EQUITY / TANGIBLE ASSETS RATIO
~ 9.9% TIER I LEVERAGE RATIO
~ 11.5% TOTAL RISK BASED CAPITAL RATIO
INTERNAL RATE OF
RETURN
~ 19.7%
ESTIMATED FINANCIAL IMPACT
(1) ACCRETION AS COMPARED TO EFSC ANALYST CONSENSUS EPS ESTIMATES; 2017 EXCLUDES TRANSACTION RELATED ONE-TIME COSTS
(2) CROSS-OVER METHOD UTILIZED IN CALCULATION OF TANGIBLE BOOK VALUE PER SHARE DILUTION EARN-BACK
(3) ESTIMATED AT TIME OF CLOSING
13
APPENDIX
14
(1) EFSC STOCK VALUED AT ITS TRAILING 15-DAY VWAP AS OF OCTOBER 10, 2016
(2) $26.6 MILLION OF CASH CONSIDERATION SUBJECT TO POSSIBLE ADJUSTMENT DUE TO STOCK OPTION EXERCISES, WITH AGGREGATE CASH CONSIDERATION PAID TO JEFFERSON COMMON SHAREHOLDERS
INCREASED DOLLAR FOR DOLLAR FOR THE AMOUNT OF ANY INCREASE TO JEFFERSON EQUITY DUE TO THE EXERCISE OF JEFFERSON STOCK OPTIONS PRIOR TO CLOSING
(3) IF THE NUMBER OF JEFFERSON COMMON SHARES OUTSTANDING AT CLOSING INCREASES FROM THE NUMBER OF JEFFERSON COMMON SHARES OUTSTANDING AT SIGNING OF THE DEFINITIVE AGREEMENT DUE TO
THE EXERCISE OF JEFFERSON STOCK OPTIONS, THE NUMBER OF JEFFERSON COMMON SHARES AT CLOSING RECEIVING STOCK CONSIDERATION WILL BE ADJUSTED TO ENSURE THE ISSUANCE OF 3,300,000 EFSC
COMMON SHARES (WITH A RECIPROCAL CHANGE MADE TO THE NUMBER OF JEFFERSON COMMON SHARES RECEIVING CASH CONSIDERATION)
PURCHASE PRICE RECONCILIATION
W-A Strike
Jefferson Common Shares Outstanding 1,472,853 Jefferson Options Outstanding 108,295 $54.72
Jefferson 6/30/16 TBVPS $61.42 Exchange Ratio 2.7500x
EFSC Stock Price for Deal Value Calculation
(1) $31.52 EFSC Shares Issued to Jefferson 3,300,000
Blended
VALUE TO COMMON % Shares Shares Price / Share P/TBV Value to Shares % Contribution Price / Share
Cash to Common Shares 18.53% 272,853 $85.39 139.0% $23,298,076 18.30%
Stock to Common Shares 81.47% 1,200,000 $86.68 141.1% $104,011,380 81.70% $86.44
Total Value to Common 100.00% 1,472,853 140.7% $127,309,456 100.00%
VALUE TO OPTIONS Options Strike Price Cash Out Price Intrinsic Value
Options - Cashed Out at the Fixed Cash Price / Share 108,295 $54.72 $85.39 $3,321,074
CONSIDERATION SUMMARY Consideration Defined Threshold
Total Value in Cash $26,619,150 $26,619,150
EFSC Shares Issued 3,300,000 3,300,000
Total Value in Stock $104,011,380
Aggregate Transaction Value $130,630,530
Bifurcated Pricing and Consideration
(2)
(3)
15
NOTE: FINANCIAL DATA AS OF JUNE 30, 2016; BANK LEVEL DATA; DOLLARS IN THOUSANDS
SOURCE: SNL FINANCIAL
OVERVIEW OF JEFFERSON
79.5% 83.4% 83.9%
84.8% 84.9% 87.4%
0.0%
25.0%
50.0%
75.0%
100.0%
2012 2013 2014 2015 2016Q1 2016Q2
Total Assets Gross Loans
Total Deposits Gross Loans / Total Deposits
$884 $891 $888 $906 $920 $928
$0
$500
$1,000
2012 2013 2014 2015 2016Q1 2016Q2
$730 $754 $742 $758 $768 $766
$0
$250
$500
$750
$1,00
2012 2013 2014 2015 2016Q1 2016Q2
$580
$629 $623 $643 $652
$670
-$10
$100
$300
$500
$700
$900
2012 2013 2014 2015 2016Q1 2016Q2
16
(1) PROFITABILITY MEASURES AS OF THE TWELVE MOTHS ENDED JUNE 30, 2016
NOTE: BANK LEVEL DATA; DOLLARS IN THOUSANDS
SOURCE: SNL FINANCIAL
OVERVIEW OF JEFFERSON
0.57%
0.77%
0.86% 0.85% 0.84% 0.85%
0.00%
1.00%
2012 2013 2014 2015 2016L1 2016L2
5.49%
7.70%
8.21% 7.77% 7.63% 7.67%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
2012 2013 2014 2015 2016L1 2016L2
$4,950
$6,850
$7,640 $7,679 $7,619 $7,733
$0
$5,000
$1 ,000
2012 2013 2014 2015 2016L1 2016L2
ROAA (1) ROAE (1)
Net Income (1) Net Interest Margin (1)
3.33%
3.58% 3.45% 3.53% 3.57% 3.53%
0.00%
1.00%
2.00%
3.00%
4.00%
5.0 %
201 2013 2014 2015 2016L1 2016L2
17
NOTE: FINANCIAL DATA AS OF JUNE 30, 2016; BANK LEVEL DATA
SOURCE: SNL FINANCIAL
OVERVIEW OF JEFFERSON
TCE / TA Tier 1 Leverage Ratio
NPAs / Assets NCOs / Average Loans
9.62% 9.47%
10.35% 10.53% 10.54% 10.51%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2012 2013 2014 2015 2016Q1 2016Q2
9.45% 9.72%
10.17% 10.46% 10.47% 10.37%
0.00%
3.00%
6.00%
9.00%
12.00%
2012 2013 2014 2015 2016Q1 2016Q2
5.28%
3.74% 3.48%
3.08% 2.94% 2.90%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.0 %
2012 2013 2014 2015 2016Q1 2016Q2
0.69%
0.15% 0.19%
0.26%
0.05% 0.04%
0.00%
0.50%
1.0 %
2012 2013 2014 2015 2016Q1 2016Q2