Good day everyone and welcome to the Enterprise Bank & Trust Enterprise Financial Services Corp. Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Peter Benoist. Please go ahead, sir.

Great. Thank you very much and I’d like to welcome everybody to our Q4 and year-end earnings call. I’d like to remind everybody on this call that a copy of the release and accompanying presentation can be found on our website. The presentation and earnings release were furnished on SEC Form 8-K earlier today. Please refer to slide number two of the presentation titled forward-looking statement, and our most recent 10-K and 10-Q for reasons why actual result may vary from any forward-looking statements we may make today. Moving on to slide number three, our fourth quarter and year-end year-over-year results were a strong indication and a continuance of maintaining our focus on the core fundamentals of the business. We grew reported earnings per share 40% and core earnings per share 29% year-over-year. Strong loan growth 23% annualized in the quarter and 13% for the year was a primary driver of these results. Originations and advances were strong in the quarter with all markets contributing. Of particular note, our enterprise value lending or senior debt segment grew 24% in the quarter and Arizona showed particularly robust growth in the commercial real estate segment as that market continues to recover. Our growth however did not come up at the cost of margin declination, as core margins expanded 9 basis points and core portfolio loan yields were stable linked quarter. Our core net interest margin expanded 4 basis points over the year, as we continued to remain disciplined on pricing on both sides of the balance sheet. Deposits increased a healthy 12% for the year. Non-interest bearing deposits increased just under 4% linked quarter and 12% year-over-year. We added 300 new business banking relationships in 2015, an increase of 62% over the prior year and our cross sell ratio increased 20% to…

Thank you, Peter. As you heard from Peter and as shown on slide number four, we were able to execute our loan growth strategy successfully in 2015, resulting in aggregate growth of 13% for the year. Q4 net growth of $149 million was particularly robust, representing increases in most major sectors of the portfolio including general C&I, CRE, consumer residential, and the niche lines of business. Breaking out the C&I segment of the portfolio on slide number five. Our pace of growth remains consistent and strong with an annual net increase in loans of $220 million or 17%. C&I continues to be a significant driver of our growth. For the quarter, roughly 80% of the increase is attributable to C&I loans, reflecting seasonal upticks in several of our niche lines of business and continued momentum in originations of new relationships across all markets. The components of our loan growth for the fourth quarter and for the year are broken out on slide number six. General C&I registered healthy growth for the quarter, resulting from elevated originations in the St. Louis and Kansas City markets. Activity included expansion of existing relationship as well as the on-boarding of several significant new clients in both markets. Q4 was also relatively strong for commercial real estate, bolstered by higher origination activity in Arizona, as well as funding on a number of construction loan closed early in the year. And while we did post decent growth for the year, we have been disciplined overall on our approach to this sector, particularly in regard to client profile, credit structure, pricing and a relationship based lending philosophy. Relative to the niche lines of business, enterprise value lending, our senior debt offering to private equity in the M&A space had a seasonally strong fourth quarter, closing 11 new…

Thank you, Scott. Our 2015 results reflect continued execution on our focused priorities. Slide number nine demonstrates the drivers of the changes in our core earnings per share from 2014 to 2015. During 2015, we greatly improved our core earnings power which grew 30% compared to the prior year to $1.66 per diluted share. Not only did we improve core earnings but we did so in the way that was revenue focused, maintained our already high-quality balance sheet, and positioned our Company to continue to drive quality earnings growth. Most notably, our revenue gains were driven by double-digit growth in both loan and deposit balances. Our earnings improved by $0.29 per share alone from continued well-funded earning asset growth primarily from core deposits. Improvement in already favorable asset quality results yielded a relatively stable provision for loan losses, as we continue to provide the growth and potential losses while as problem loans resulted in reduced loan, legal and workout expenses improving non-interest expense by $0.06. Additionally, we made some modest gains in our service charge income and for tax credit related businesses to contribute another $0.03 per share in 2015. On the next slide 10, purchase credit impaired loans contributed additional $0.23 per common share, including the successful exit of loss share coverage on acquired assets during the quarter. Reported earnings totaled $1.89 for 2015 and our return on average assets was 1.14%. Additionally, we grew tangible common equity by 13% during 2015, tangible book value by 12%. Our stock appreciated nearly 45% and we rewarded shareholders with a series of dividend increases that reflect our elevated earnings profile and attention to capital level. As you can see on slide 11, we ended 2015 with strong momentum. We continued to deliver a steady progression of high quality core earnings which…

[Operator Instructions] We’ll take our first question from Jeff Rulis with D.A. Davidson. Your line is open.

Thanks, good afternoon. Question on the just the termination of the loss share, I just wanted to make sure, in the P&L that is I guess in ‘16 completely, the receivable lines goes away, no other gains or charges, is that correct?

That’s correct. So, that accounting goes away, you still get the incremental accretion if we get a an early payoff potentially. You still have the extra provision line item related there too and there could be some gain or loss on exists of real estate from that. But we expect that to generally be positive over the next year, as we indicated, we expected are on that charts back. But yes, the other income and other expense accounting goes away with the call back and the write-off of the II. [Ph]

And then on that provision, it’s a combination of things. But I guess on the baseline, you guys have been $1 million to $2 million a quarter and then the PCI impact is swinging. Any expectations I guess for ‘16, either on a baseline or a combined total?

I guess what we would say, right now what we said is we took that $0.07 charge and we expect that to come back over the next 12 months. So right now that’s our expectation sort of everything playing out as we anticipated a few weeks ago when we announced that. So, we don’t have anything incremental at this point. And we will continue to report on that. But I’d just point out that those assets have generally performed better than we expected and we are hopeful that we’re conservative in that prediction.

And then I guess a last housekeeping just on the tax rate is 34 unchanged, would that be a number for ‘16?

Yes, we are at that 34% to 35% range for next year, we expect it to be.

Thank you. And we will move next to Michael Perito with KBW. Your line is open.

Peter, question for you maybe just on strategy. As we start 2016 here now, capital levels are pretty robust and you have the FDIC loss share termination behind you. I mean maybe give us a rundown outside of obviously the organic growth target as Keene mentioned. How do you guys are thinking about capital deployment going forward?

Sure, I would say a couple of things. One, if you look at organic growth rates, obviously they’re running double-digit; we expect that to continue. So clearly that’s our primary focus and we think we are pretty confident in that respect. M&A is a question that comes up from time-to-time. Our response historically has been we’re focused on it; I’d say we are focused on it. Our thought process there is traditionally in footprint as opposed to not in footprint, but opportunities that would extend our franchise value, particularly in the core deposit and fee income arenas. And I would say in that regard, we are probably a little more intentional this year than we have been in prior years, A, given our capital levels; and B, giving our current valuations. Third, as you know we’ve had a series of increased dividends which from that perspective we think just gets us to more what I’ll call peer levels in terms of payout ratios. And then finally in terms of the authorization on buyback that’s an opportunity for us and we’ll take advantage of it opportunistically when the occasions arise.

And how would you describe I guess the pipeline of maybe deposit-driven or fee income wealth type acquisition as it stands today? I mean, is this something where you’d be hopeful that you can at least announce something this year or is it really just more aspirational?

There is no way to predict that Michael in terms of timing. I mean I really can’t say more than we are focused and we are pretty disciplined in terms of our process. That’s really important right now. We are in no hurry, I think it’s fair to say given our current performance and we’ve got tremendous momentum. So, on the other side of the coin, we don’t want to disrupt momentum but we will certainly take advantage of the good opportunity.

Okay, thanks. And then on the -- in the prepared remarks, you guys mentioned a couple of times kind of a focus on organically building the trust and wealth business. I mean, what kind of penetration do you guys have with your C&I clients I guess today? And what do you guys think is a realistic kind of target/growth rate for next year, if it kind of plays out the way you guys are hoping?

Yes, I’d say penetration is an opportunity for us. That’s clear; I think that’s true for any organization. So that’s a focus for us. I think the other area that we are spending a little more time trying to get maybe better understanding of from a client perspective is literal private banking initiatives, and Scott is taking a lead on that this year. We think that will provide an opportunity for us to grow assets from a wealth perspective. We really haven’t been that intentional in that respect and I think we feel there is an opportunity to do that really in certainly two of our three markets this year. In terms of growth rates, between swings and market values and everything else that goes on and that’s pretty tough to predict.

Just asking another way, do you guys -- I mean your non-interest income, a portion of your operating revenues is running around 15% today plus or minus. I mean do you guys have any internal targets that you would like to -- that you think your business model should be able to achieve?

I guess I would say differently. We don’t necessarily have a target. I mean the good news is that we are growing net interest income pretty substantially, so we have eclipse the double digit growth rates and make a dent in that. So, we’re really looking at just trying to make sure that we’ve got a complement of services and that we’re selling as deep as we possibly can be. Once we get a little bit more of that infrastructure build, I think I indicated that we’ve gotten to a point where we -- may be gotten to the point of profitability and scalability in some of our businesses. We’re now more focused on that. So, we don’t -- we’re not out there telling you what the growth rate would be or what our goals are yet, we’re still defining some of that. I think the good news is that we had really strong revenue growth, we expect continue that. And we’re excited about it and the amount of customers we’re introducing to the platform. So, that tends to be our focus. But I wouldn’t expect us to make absent M&A activities or something like that, a meaningful shift in that contribution just because of the pace we expect the total revenue line to grow.

Thank you. We’ll go next to Brian Martin with FIG Partners. Your line is open.

Maybe you guys mentioned a couple of times the same about the -- your optimism on the core deposit or the core margin expansion. And just I guess part of my question was, I mean are you guys seeing much in the deposit pricing pressure but obviously it sounds like that’s not the case, if the -- or optimistic about expanding at even beyond what we saw this quarter. Just can you give a little thought on what gives you the optimism on the core margin expansion from current level where we are sitting today?

There’s a couple of components that we’re seeing, the most immediate that gives us the optimism of that we have some higher cost deposits that are going to roll off over the next couple of quarters. So, we think that’ll be helpful. And those were longer term four and five-year deals that are coming out. So that’s a pretty heavy pricing. We’re seeing some pressure in certain segments of the deposit markets but we expect net-net that it’ll still be positive, plus you have the big wave of Q4 loan growth coming in. So, we’ve got a lot going for us. The margin expanded nine basis points in the quarter, so starting the year at 350 plus growth. We feel pretty good about that. Much beyond the next couple of quarters, it’ll be hard to predict but we’re more optimistic than we were a few quarters ago.

And maybe just one other question on the loan this quarter. It sounded like Kansas City was flat, and I guess anything keeping, holding back Kansas City at this point or is it just payoffs or something in the quarter restrained, and maybe you that and I just missed it? Sorry.

Kansas City performed well. I think the one thing we did is we split the EVL. As I mentioned, we split the lending segments out this quarter. Here we have a lending team, EVL lending team in Kansas City. They’ve done well but that really shows up more in the specialty lending piece. And then I think Kansas City had some good business development on new relationships for C&I and CRE but they also had some line pay downs and a couple of payoffs of construction loans that went to the permanent market. So, I’m still optimistic that Kansas City can continue on a decent growth pace going forward.

And just as you guys look to the 10% growth, if you will, in 2016, can you just kind of talk about where whether it’d be -- just break it out kind of by Kansas City, St. Louis, Phoenix and then kind of the niche businesses where -- I guess where you expect most of the growth to come from? It sounds -- it looks like unless I looked at the slides wrong, they were about 317 million in growth in the niche businesses this year. So, just kind of any thoughts or color you can give on just where the optimism you see in the pipeline would be helpful?

Yes, I mean that’s a lot of detailed guidance for us to give. I guess I say our plan is probably to continue to leverage where we’ve been successful. Scott mentioned some opportunities we took advantage of to bring some new origination capabilities on line and that might augment our growth a little bit. But I think it’s going to be a little bit more of the same for next year but we’re not giving guidance by line or region or anything like that.

I wasn’t looking for guidance as much just where are you seeing more strength versus any weakness today? It sounded as if Kansas City might not be quite as strong but just I was looking more in general than specific.

I don’t know that we expect any major shift over prior year trends. There’s nothing that we see on the horizon that would cause us to think that on a commentary basis would be a significant change year-over-year.

Thank you. [Operator Instructions] We’ll go next to Andrew Liesch from Sandler O’Neill. Your line is open.

Your loan growth forecast for this year is still pretty optimistic and it sounds like be a lot more the same but there have been some concerns elsewhere in maybe the broader economy. So, Peter, I am just curious if you’re seeing -- anything that concerns you in the markets that you guys are operating in?

No, I mean I said in my formal comments in terms of concentrations, we think the diversification of the portfolio is in very good shape and the geographies are performing well. I indicated that we continue to be disciplined around risk management; we think that’s really important. Classified test levels -- I’m sorry criticized test levels, classifieds are down. So, I don’t know no there’s anything that we’re overly concerned about. At this stage I think we are optimistic relative to growth. I think part of that is really just to do to the fact our business model is being executed really well in all markets. And as Keene mentioned, number of our specialty niches continue to drive some pretty good growth outside of our footprint. So, I mean I think what we try to do with all of you is indicate that management is focused on consistent execution and we’re continuing to be focused on consistent execution. From a credit risk perspective, obviously our metrics are very good; we would expect them to continue to be good. And I’m not aware of anything that would give us any significant concern from a risk perspective that’s out of the obvious.

[Operator Instructions] Eric Grubelich, an investor. Your line is open.

Hi. Good afternoon. I just had a macro question for you. At the beginning of the presentation, you talked about it, I think it was adding 300 commercial banking relationships in 2015. I was curious if you could help us with -- when you look at what you added, how does it compare from a profitability perspective compared to the average of the bank? Is it -- will it take you like a few years to get it up to the average of what the rest of the bank produces and do you anticipate adding that level in 2016 or better?

Those were business banking relationships that Peter mentioned. Those are little bit smaller size relationship for us. But typically the way that we look at relationships is we have to meet certain return thresholds to even bring them into the bank. So typically it’s not approve and expand relationship. So, you’ve seen us expand our returns in recent years with the growth and the reason for that is because we are requiring hurdle rates on all bars, new business and exceptions are very limited?

Thank you. And we have no further questions at this time. I’d like to turn the call back to our presenters today for any closing remarks.

Great. Thank you very much. Again, thanks to all of you for joining us on the call. I think I’d just reiterate, we entered the year with positive mindset and we are looking forward to a good year. So, thanks for your interest and hopefully we will see you next quarter.

This does conclude today’s program. Thank you for your participation. You may disconnect at any time.