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Home›Variable Rate Loans›ENTERPRISE FINANCIAL SERVICES CORP: DISCUSSION AND ANALYSIS OF MANAGEMENT’S FINANCIAL POSITION AND PERFORMANCE (Form 10-K)

ENTERPRISE FINANCIAL SERVICES CORP: DISCUSSION AND ANALYSIS OF MANAGEMENT’S FINANCIAL POSITION AND PERFORMANCE (Form 10-K)

By Mary M. Cox
February 25, 2022
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introduction

The objective of this section is to provide an overview of the results of
operations and financial condition of the Company by focusing on changes in
certain key measures from year to year. It should be read in conjunction with
the Consolidated Financial Statements and related Notes contained in "Item 8.
Financial Statements and Supplementary Data," and other financial data presented
elsewhere in this report, particularly the information regarding the Company's
business operations described in Item 1. A detailed discussion comparing 2020
and 2019 results is incorporated herein by reference to Item 7 of the Company's
2020 Annual Report on Form 10-K filed on February 19, 2021.

Executive Summary
Our Company offers a broad range of business and personal banking services
including wealth management services. Lending services include commercial and
industrial, commercial real estate, real estate construction and development,
residential real estate, specialty, and other loans. A wide variety of deposit
products and a complete suite of treasury management and international trade
services complement our lending capabilities. Tax-credit brokerage activities
consist of the acquisition of Federal and State tax credits and the sale of
these tax credits. The Company's results of operations are also affected by
prevailing economic conditions, competition, government policies and other
actions of regulatory agencies.

The Company's financial condition, operating results and liquidity in 2020 and
2021 were impacted by COVID-19 and the monetary and fiscal policy changes
enacted to address the pandemic. Starting in 2020, the Federal Reserve reduced
interest rates and reserve requirements, while also increasing quantitative
easing through purchases of Treasuries and agency mortgage-backed securities.
The federal government's fiscal support of the economy through the Cares Act,
the ARA and other acts have been highly expansionary. Low interest rates, supply
chain disruptions and monetary and fiscal policies contributed to higher
inflation in 2021, leading the Federal Reserve to begin tapering its
quantitative easing in November 2021.

The following table summarizes the significant components of First Choice’s and Seacoast’s transactions at the time of acquisition. See “Item 8. Note 2 – Acquisitions” for more information.

                             First Choice            Seacoast
($ in thousands)             July 21, 2021      November 12, 2020
Loans, net                  $   1,936,137      $        1,190,441
Securities                         34,489                       -
Total assets acquired           2,248,062               1,312,037

Deposits                        1,840,429               1,081,006
Total liabilities assumed       2,006,857               1,193,595

Consideration paid:
Cash                        $       2,152      $            1,630
Common stock1                     343,650                 167,035
Total consideration paid    $     345,802      $          168,665

1 The consideration for common stock for First Choice was $342,280net $1,370 for retained shares in the settlement of stock-based compensation for First Choice employees.




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Financial Performance Highlights Below are highlights of our financial performance over the past few years
December 31, 20212020 and 2019.

                                                                    Year ended December 31,
($ in thousands, except per share data)                   2021                 2020                2019

MERITS

Total interest income                               $    383,230           $  304,779          $  305,134
Total interest expense                                    23,036               34,778              66,417
Net interest income                                      360,194              270,001             238,717
Provision for credit losses                               13,385               65,398               6,372
Net interest income after provision for loan losses      346,809              204,603             232,345
Total noninterest income                                  67,743               54,503              49,176
Total noninterest expense                                245,919              167,159             165,485
Income before income tax expense                         168,633               91,947             116,036
Income tax expense                                        35,578               17,563              23,297
Net income                                          $    133,055           

$74,384 $92,739

Basic earnings per share                            $       3.86           $     2.76          $     3.56
Diluted earnings per share                          $       3.86           

$2.76 $3.55

Return on average assets                                    1.16   %             0.90  %             1.35  %
Return on average common equity                            10.49   %             8.24  %            11.66  %
Return on average tangible common equity1                  14.18   %            11.23  %            16.08  %
Net interest margin (fully tax equivalent)                  3.41   %             3.56  %             3.80  %

Efficiency ratio                                           57.47   %            51.51  %            57.48  %
Core efficiency ratio1                                     51.61   %            50.96  %            52.36  %
Dividend payout ratio                                      19.66   %            26.61  %            17.87  %
Book value per common share                         $      38.53           $    34.57          $    32.67
Tangible book value per common share1               $      28.28           $    25.48          $    23.76
Average common equity to average assets                    11.14   %            10.94  %            11.54  %
Tangible common equity to tangible assets1                  8.13   %             8.40  %             8.89  %

                                                             At or for the year ended December 31,
                                                          2021                 2020                2019
ASSET QUALITY
Net charge-offs                                     $     11,629           $    1,907          $    6,410
Nonperforming loans                                       28,024               38,507              26,425
Classified assets                                        100,797              123,808              85,897
Nonperforming loans to total loans                          0.31   %             0.53  %             0.50  %
Nonperforming assets to total assets                        0.23   %             0.45  %             0.45  %
Allowance for loan losses to total loans                    1.61   %             1.89  %             0.81  %
Net charge-offs to average loans                            0.14   %             0.03  %             0.13  %


1Non-GAAP measures. A reconciliation has been included in this MD&A section under the heading “Use of Non-GAAP Financial Measures.”

The company has identified the following trends in 2021:

•The Company reported net income of $133.1 million, or $3.86 per diluted share
for 2021, compared to $74.4 million, or $2.76 per diluted share for 2020. In
addition to organic growth, contributing to the
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increase in net income was a full year of Seacoast operations and a partial year
of First Choice operations. Net income also benefited from a reduction in the
provision for credit losses of $52.0 million in 2021 compared to 2020, which was
partially offset by a $17.9 million increase in merger-related expenses.
Acquisition related provision for credit losses of $25.4 million and $8.6
million in 2021 and 2020, respectively, were included in the provision for
credit losses. This expense, commonly referred to as the "CECL double-count", is
recognized when a loan portfolio is acquired. Excluding the CECL double-count,
the provision for credit losses decreased in 2021 primarily due to strong credit
quality, the forward-looking CECL methodology and the improved outlook for
forecasted economic factors compared to 2020.

•Net interest income for 2021 totaled $360.2 million, an increase of
$90.2 million, or 33%, compared to $270.0 million for 2020. PPP interest and fee
income totaled $27.3 million and $19.6 million in 2021 and 2020, respectively.
The First Choice acquisition added $37.9 million and the Company benefited from
a full year of Seacoast operations in 2021 compared to a partial year in 2020.
Organic growth in the loan portfolio also contributed to the current year
increase in net interest income.

•Net interest margin decreased 15 basis points to 3.41% during 2021, compared to
3.56% in 2020. The decrease was primarily due to an increase in liquidity from
deposit growth. Average interest-bearing cash accounts of $1.1 billion had a
yield of 0.14% in 2021, compared to $228.8 million at a yield of 0.27% in 2020.
•Noninterest income increased $13.2 million, or 24%, to $67.7 million in 2021
compared to $54.5 million in 2020. This improvement was primarily due to organic
growth and the acquisitions of Seacoast and First Choice.

•Noninterest expenses totaled $245.9 million for 2021, an increase of $78.8
million , or 47%, compared to 2020. Seacoast and First Choice increased
noninterest expense $51.2 million in 2021 compared to 2020, in addition to a
$17.9 million increase in merger-related expenses year-over-year. The Company's
efficiency ratio was 57.5% in 2021, compared to 51.5% for the prior year. The
increase in 2021 was primarily due to merger-related expenses. The Company's
core efficiency ratio1 was relatively stable at 51.6% in 2021, compared to 51.0%
for the prior year.

•The Company's effective tax rate was 21.1% in 2021 compared to 19.1% in 2020.
The higher rate in 2021 primarily resulted from higher pre-tax income and the
Company's expanded geographic footprint and the related state apportionment.

1Non-GAAP measures. A reconciliation has been included in this MD&A section under the heading “Use of Non-GAAP Financial Measures.”

2021 Significant Transactions
During 2021, we announced the following significant transactions:

•On July 21, 2021, the Company announced the completion of its acquisition of
First Choice, a commercial bank based in Los Angeles, CA, with $2.3 billion in
assets. The overall transaction had a value of $346 million.

•Continued to support customers through PPP, additional lending $341 million
of PPP loans.

•The Company announced the closing of five branch locations in California and
St. Louis. A lease and fixed asset impairment charge of $3.8 million was
recognized, including $0.4 million reported in merger-related expenses. The
Company expects to realize annual cost savings of approximately $2.3 million
related to these closures.

•The company redeemed $50.0 million 4.75% Fixed to Floating Rate Subordinated Notes.

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•The Company has issued and sold 3,000,000 common shares, each representing 1/40th interest in one common stock of 5% non-cumulative perpetual preferred stock $72.0 millionminus emission costs.

•The Company repurchased 1,299,527 of its common shares at a weighted-average
share price of $46.62. At December 31, 2021, there were 700,473 shares remaining
to be purchased under the existing share repurchase plan.

•Dividends paid in 2021 by $0.75 per share increased $0.03 per share or 4% compared to $0.72 per share in 2020.

2020 Significant Transactions
During 2020, we announced the following significant transactions:

•On November 12, 2020, the Company announced the completion of its acquisition
of Seacoast which operated five full-service retail and commercial banking
offices in California and Nevada as well as SBA loan production offices and
deposit production offices in various states. Aggregate consideration at closing
was 5.0 million shares of Company common stock to Seacoast shareholders. The
overall transaction had a value of $169 million.

• Helped new and existing clients navigate and access PPP loans by approving approximately 3,900 loans in total $859 million.

•In May 2020, the Company issued $63.3 million of 5.75% fixed-to-floating rate
subordinated notes due in 2030. The notes are callable beginning in 2025 and are
included in tier 2 capital.

•The Company repurchased 456,251 of its common shares at a weighted average share price of $33.64.

•Dividends paid in 2020 by $0.72 per share increased $0.10 per share or 16% compared to $0.62 per share in 2019.

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RESULTS OF OPERATIONS
Net Interest Income
Average Balance Sheet
The following table presents, for the periods indicated, certain information
related to our average interest-earning assets and interest-bearing liabilities,
as well as, the corresponding interest rates earned and paid, all on a tax
equivalent basis. Average balances are presented on a daily average basis.

                                                                                                                                               Year ended December 31,
                                                                                2021                                                                    2020                                                                    2019
                                                                                                        Average                                                                 Average                                                                 Average
                                                                                 Interest                Yield/                                          Interest                Yield/                                          Interest                Yield/
($ in thousands)                                    Average Balance           Income/Expense              Rate              Average Balance           Income/Expense              Rate              Average Balance           Income/Expense              Rate
Assets
Interest-earning assets:
Loans1, 2                                         $      8,055,873          $       349,112                 4.33  %       $      6,071,496          $       270,673                 4.46  %       $      5,018,568          $       269,864                 5.38  %
Taxable securities                                         908,189                   19,305                 2.13                 1,016,100                   25,524                 2.51                 1,064,913                   30,085                 2.83
Non-taxable securities2                                    659,804                   18,468                 2.80                   350,501                   11,151                 3.18                   131,161                    4,668                 3.56
Total securities                                         1,567,993                   37,773                 2.41                 1,366,601                   36,675                 2.68                 1,196,074                   34,753                 2.91
Interest-earning deposits                                1,084,853                    1,496                 0.14                   228,760                      620                 0.27                   107,433                    2,128                 1.98

                    Total interest-earning assets       10,708,719                  388,381                 3.63                 7,666,857                  307,968                 4.02                 6,322,075                  306,745                 4.85
Noninterest-earning assets                                 758,591                                                                 587,057                                                                 572,216
                                     Total assets $     11,467,310                                                        $      8,253,914                                                        $      6,894,291

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand accounts                  $      2,122,752          $         1,614                 0.08  %       $      1,494,364          $         2,101                 0.14  %       $      1,286,641          $         7,592                 0.59  %
Money market accounts                                    2,557,836                    4,669                 0.18                 1,977,826                    7,754                 0.39                 1,608,349                   26,267                 1.63
Savings accounts                                           724,768                      225                 0.03                   589,832                      279                 0.05                   489,310                      841                 0.17
Certificates of deposit                                    570,496                    4,160                 0.73                   676,889                   10,915                 1.61                   799,079                   15,156                 1.90
                  Total interest-bearing deposits        5,975,852                   10,668                 0.18                 4,738,911                   21,049                 0.44                 4,183,379                   49,856                 1.19
Subordinated debentures and notes                          195,686                   10,960                 5.60                   179,534                    9,885                 5.51                   136,950                    7,507                 5.48
FHLB advances                                               59,945                      803                 1.34                   241,635                    2,673                 1.11                   287,474                    6,668                 2.32
Securities sold under agreements to repurchase             225,894                      235                 0.10                   206,338                      542                 0.26                   169,179                    1,246                 0.74
Other borrowings                                            26,428                      370                 1.40                    32,147                      629                 1.96                    32,392                    1,140                 3.52
               Total interest-bearing liabilities        6,483,805                   23,036                 0.36                 5,398,565                   34,778                 0.64                 4,809,374                   66,417                 1.38
Noninterest bearing liabilities:
Demand deposits                                          3,597,204                                                               1,854,982                                                               1,228,832
Other liabilities                                          109,148                                                                  97,492                                                                  60,608
                                Total liabilities       10,190,157                                                               7,351,039                                                               6,098,814
Shareholders' equity                                     1,277,153                                                                 902,875                                                                 795,477
         Total liabilities & shareholders' equity $     11,467,310                                                        $      8,253,914                                                        $      6,894,291
                              Net interest income                           $       365,345                                                         $       273,190                                                         $       240,328
                              Net interest spread                                                           3.27  %                                                                 3.38  %                                                                 3.47  %
             Net interest margin (tax equivalent)                                                           3.41                                                                    3.56                                                                    3.80

1Average balances include interest-free loans. Interest income includes net loan fees of $28.4 million, $18.4 millionand $4.5 million for the past years
December 31, 20212020 and 2019, respectively. Loan fees in 2021 and 2020 included PPP fees of $21.7 million and $13.8 millionor.

2Non-taxable income is presented on a fully tax-equivalent basis using a 25.2%
tax rate in 2021 and a 24.7% tax rate in each of 2020 and 2019. The
tax-equivalent adjustments were $5.1 million for the year ended December 31,
2021, $3.2 million for the year ended December 31, 2020, and $1.6 million for
the year ended December 31, 2019.


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Rate/Volume

The table below summarizes, on a tax equivalent basis, the changes in interest income and expense resulting from changes in yield/rates and volume for the periods shown.

                                                           2021 compared to 2020                                   2020 compared to 2019
                                                        Increase (decrease) due to                              Increase (decrease) due to
($ in thousands)                                Volume1             Rate2              Net             Volume1             Rate2               Net
Interest earned on:

Loans                                        $   86,183          $ (7,744)         $ 78,439          $  51,290          $ (50,481)         $    809
Taxable securities                               (2,541)           (3,678)           (6,219)            (1,334)            (3,227)           (4,561)
Non-taxable securities3                           8,799            (1,482)            7,317              7,027               (544)            6,483
Interest-earning deposits                         1,313              (437)              876              1,228             (2,736)           (1,508)

Total interest-earning assets                    93,754           (13,341)           80,413             58,211            (56,988)            1,223

Interest paid on:
Interest-bearing demand accounts             $      689          $ (1,176)         $   (487)         $   1,063          $  (6,554)         $ (5,491)
Money market accounts                             1,844            (4,929)           (3,085)             4,970            (23,483)          (18,513)
Savings                                              55              (109)              (54)               145               (707)             (562)
Certificates of deposit                          (1,506)           (5,249)           (6,755)            (2,142)            (2,099)           (4,241)
Subordinated debentures and notes                   902               173             1,075              2,345                 33             2,378
FHLB advances                                    (2,341)              471            (1,870)              (933)            (3,062)           (3,995)
Securities sold under agreements to
repurchase                                           47              (354)             (307)               229               (933)             (704)
Other borrowed funds                               (100)             (159)             (259)                (9)              (502)             (511)
Total interest-bearing liabilities                 (410)          (11,332)          (11,742)             5,668            (37,307)          (31,639)
Net interest income                          $   94,164          $ (2,009)  

$92,155 $52,543 $ (19,681) $32,862

1 Change in volume multiplied by the yield/price of the previous period. 2Yield/price change multiplied by the volume of the previous period. 3Non-taxable income is presented on a full tax equivalent basis using a tax rate of 25.2% and 24.7% for 2021 and 2020, respectively. NOTE: Interest rate change due to price and volume has been mapped to price and volume changes in proportion to the ratio of the absolute dollar amounts of each change.



Net interest income (on a tax equivalent basis) was $365.3 million for 2021,
compared to $273.2 million for 2020, an increase of $92.2 million, or 34%. Total
interest income increased $80.4 million and total interest expense decreased
$11.7 million. The increase in net interest income in 2021 was primarily due to
higher loan volumes, which benefited from the Seacoast and First Choice
acquisitions, PPP loans, and a decline in the interest rate on interest-bearing
liabilities.

Loans issued through the PPP bear interest at 1% and have either a two or five
year maturity. As a PPP lender, the Company also receives fees for the issuance
of PPP loans that vary based on the size of the loan. Interest income and loan
fees included in net interest income from the PPP program totaled $27.3 million
and $19.6 million in 2021 and 2020, respectively. During 2021, the Company
received $14.6 million in PPP loan fees for loans originated in the year. These
fees are recognized over the life of the loan, or when the loan is repaid or
forgiven. At December 31, 2021, the Company has $272.0 million in PPP loans and
$4.2 million in deferred fees, compared to $698.6 million in loans and $11.3
million in fees at the end of 2020.

The tax-equivalent net interest margin was 3.41% for 2021, compared to 3.56% for
2020. The primary driver of the decline in net interest margin from 2020 to 2021
was an increase in liquidity from deposit growth. Average interest-bearing cash
balances grew to $1.1 billion, an increase of $856.1 million from 2020. In
addition, 2021 was impacted by a full year of low interest rates following the
Federal Reserve's reduction of interest rates in 2020. The federal funds target
rate declined 150 basis points in 2020 and one-month LIBOR declined over 160
basis points. The
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decline in short-term rates reduced the yield on the Company's variable-rate
loan portfolio, as well as the yield earned on new loan production. As of
December 31, 2021, variable-rate loans comprised approximately 63% of total
loans. In response to the decline in interest rates, the Company proactively
reduced the cost of certain managed money market and interest-bearing accounts,
while also reducing certificates of deposit balances and wholesale borrowings.

Average interest-earning assets increased $3.0 billion, or 40%, to $10.7 billion
for the year ended December 31, 2021. The increase was due to growth in average
earning assets due to the inclusion of a full year of Seacoast operations, a
partial year of First Choice operations and the previously mentioned increase in
liquidity from deposit generation. Average securities represented 15% of
earnings assets in 2021 and 18% in 2020. The acquisitions of Seacoast and First
Choice did not include any significant investment security balances. The Company
has taken a measured approach to investing excess liquidity into the investment
portfolio, increasing the average balance from $1.4 billion in 2020 to $1.6
billion in 2021. Average interest-earning deposits increased from 3% to 10% of
earning assets, primarily due to higher liquidity from deposit growth. Volume
growth of the balance sheet drove an increase in interest income on earning
assets of $93.8 million. Interest income on interest-earnings assets decreased
$13.3 million primarily due the decline in interest rates in 2021 compared to
2020.

Average interest-bearing liabilities increased $1.1 billion, or 20% for the year
ended December 31, 2021. The increase resulted from $1.2 billion of growth in
interest-bearing deposits. While average interest-bearing liabilities increased,
interest expense declined $11.7 million due to a 26 basis point decline in the
cost of deposits, primarily due to the run-off of higher yielding certificates
of deposit. The Company issued $63.3 million of subordinated debentures in May
2020 with an interest rate of 5.75% that was included for a full year in 2021.
Partially offsetting this additional expense was the redemption of the $50.0
million subordinated debentures at 4.75% in the fourth quarter 2021. The total
cost of interest-bearing liabilities declined 28 basis points, from 0.64% in
2021 to 0.36% in 2021. The shift in the mix of interest-bearing liabilities from
certificates of deposit and wholesale borrowings to interest-bearing and
noninterest-bearing deposits reduced interest expense in 2021 by $0.4 million.
Interest expense on interest-bearing liabilities decreased $11.3 million for the
year ended December 31, 2021 due to lower rates.


Noninterest Income
The following table presents a comparative summary of the major components of
noninterest income for each of the years in the three-year period ended
December 31, 2021:

                                              Year ended December 31,                                    Change from
($ in thousands)                     2021               2020               2019             2021 vs. 2020           2020 vs. 2019
Service charges on deposit
accounts                         $  15,428          $  11,717          $  

12,801 $3,711 $ (1,084)
Income from wealth management

           10,259              9,732              9,932                     527                    (200)
Card services revenue               11,880              9,481              9,154                   2,399                     327

Tax credit income                    8,028              6,611              5,393                   1,417                   1,218

Miscellaneous income                22,148             16,962             11,896                   5,186                   5,066

Total interest-free income $67,743 $54,503 $49,176 $13,240 $5,327



Noninterest income increased $13.2 million, or 24%, in 2021 compared to 2020.
This improvement was primarily due to a $5.4 million increase from Seacoast and
First Choice, a $3.6 million increase in other income, primarily private equity
and community development investments, a $2.4 million increase in card services
income, and a $1.4 million increase in tax credit activity.



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Noninterest Expense
The following table presents a comparative summary of the components of
noninterest expense:

                                                       Year ended December 31,                                      Change from
($ in thousands)                              2021                  2020               2019            2021 vs. 2020          2020 vs. 2019
Employee compensation and benefits     $      124,904           $  92,288          $  81,295          $      32,616          $      10,993
Occupancy                                      16,286              13,457             12,465                  2,829                    992
Data processing                                12,242               9,050              8,242                  3,192                    808
Professional fees                               4,289               3,940              3,683                    349                    257

Branch-closure expenses                         3,441                   -                  -                  3,441                      -
Merger-related expenses                        22,082               4,174             17,969                 17,908                (13,795)
Other expenses                                 62,675              44,250             41,831                 18,425                  2,419
Total noninterest expense              $      245,919           $ 167,159          $ 165,485          $      78,760          $       1,674

Efficiency ratio                                57.47   %           51.51  %           57.48  %                5.96  %               (5.97) %
Core efficiency ratio1                          51.61   %           50.96  %           52.36  %                0.65  %               (1.40) %

1 A non-GAAP measure. A reconciliation has been included in this MD&A section under the heading “Use of Non-GAAP Financial Measures.”



Noninterest expense increased $78.8 million, or 47%, in 2021 compared to 2020.
The acquisitions of Seacoast and First Choice added $57.2 million of operating
expenses in 2021, compared to $6.0 million from Seacoast in 2020. Excluding
First Choice and Seacoast, employee compensation and benefits increased $7.0
million in 2021 compared to 2020, or 8%. The primary components of the increase
in compensation and benefits were $2.7 million in salaries from merit increases
and net new positions, $1.3 million in employee benefits, and $1.2 million in
equity-based compensation.

The Company announced in the third quarter of 2021 the closure of two branch
locations in St. Louis and recognized a lease and fixed asset impairment charge
of $3.4 million. The branch closures became effective in January 2022. Merger
related expenses of $22.1 million on the First Choice and Seacoast acquisitions,
including the cost of closing three California locations, were $17.9 million
higher than the $4.2 million recorded in 2020 on the Seacoast acquisition. The
Company expects to realize annual cost savings of approximately $2.3 million
related to these closures.

The Company did not earn a full year of operating income, or incur a full year
of expense, from First Choice in 2021, but will do so in 2022. The Company does
not expect to incur any additional merger expenses on First Choice or Seacoast.

The Company expects to continue to invest in its associates and other
infrastructure that supports growth. In addition, low unemployment, inflationary
pressures and a shift in employee work arrangements to a virtual/hybrid model
are expected to impact future operating expenses.

Income Taxes
The Company's blended federal and state tax rate is approximately 25.2% at the
end of 2021, compared to 24.9% at the end of 2020. Permanent differences between
pre-tax income and taxable income along with tax planning initiatives reduced
the effective income tax rate in 2021 to 21.1% compared to 19.1% in 2020. The
increase in the effective tax rate in 2021 was primarily due to higher pretax
income in 2021 and an increase in state taxable income due to the Company's
expanded geographic footprint. Additionally, in 2020, the Company was able to
carryback a net operating loss to a prior period with a higher tax rate,
reducing the effective tax for that year.


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FINANCIAL CONDITION

Summary Balance Sheet

                                                        December 31,                                           % Increase (Decrease)
($ in thousands)                        2021                2020                2019               2021 vs. 2020                2020 vs. 2019
Total cash and cash equivalents    $ 2,021,689          $  537,703          $  167,256                     275.99  %                      221.49  %

Securities                           1,795,687           1,400,039           1,316,483                      28.26  %                        6.35  %
Total loans                          9,017,642           7,224,935           5,314,337                      24.81  %                       35.95  %

Total assets                        13,537,358           9,751,571           7,333,791                      38.82  %                       32.97  %
Deposits                            11,343,799           7,985,389           5,771,023                      42.06  %                       38.37  %
Total liabilities                   12,008,242           8,672,596           6,466,606                      38.46  %                       34.11  %
Total shareholders' equity           1,529,116           1,078,975             867,185                      41.72  %                       24.42  %



Assets
Loans by Type
The Company has a diversified loan portfolio, with no particular concentration
of credit in any one economic sector; however, a substantial portion of the
portfolio, including the C&I category, is secured by real estate. The ability of
the Company's borrowers to honor their contractual obligations is partially
dependent upon the local economy and its effect on the real estate market.

The following table sets forth the composition of the Company's loan portfolio
by type of loans:

                                                    December 31,
($ in thousands)                               2021              2020
Commercial and industrial                 $ 3,392,375       $ 3,088,995

Commercial real estate – owned by investors 2,141,143 1,589,419 Commercial real estate – owner occupied 2,035,785 1,498,408 Construction and land development

             734,073           546,686
Residential real estate                       454,052           319,179
Other                                         260,214           182,248

Total loans                               $ 9,017,642       $ 7,224,935

                                                    December 31,
                                               2021              2020
Commercial and industrial                        37.6  %           42.8  %
Commercial real estate - investor owned          23.8  %           22.0  %
Commercial real estate - owner occupied          22.6  %           20.7  %
Construction and land development                 8.1  %            7.6  %
Residential real estate                           5.0  %            4.4  %
Other                                             2.9  %            2.5  %

Total loans                                     100.0  %          100.0  %



C&I loans are made based on the borrower's ability to generate cash flows for
repayment from income sources, general credit strength, experience, and
character, even though such loans may also be secured by real estate or other
assets. The credit risk related to commercial loans is largely influenced by
general economic conditions and the resulting impact on a borrower's operations.
PPP loans of $272.0 million and $698.6 million were included in C&I loans in the
tables above at the end of 2021 and 2020, respectively.

The company remains focused on building high quality C&I relationships as these typically feature variable interest rates and allow for cross-selling opportunities with other banking products. C&I loan growth as well

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supports our efforts to maintain the Company's asset-sensitive interest rate
risk position. Additionally, our specialized products, especially sponsor
finance, life insurance premium financing, and tax credit financing/lending,
consist of primarily C&I loans, and have contributed significantly to the
Company's C&I loan growth. These loans are sourced through relationships
developed with wealth and estate planning firms and private equity funds and are
not bound geographically by our markets. As a result, these specialized loan
products offer opportunities to expand and diversify our overall geographic
concentration by entering into new markets.

Real estate loans focus on the estimated cash flows from operating the property and/or the underlying value of the collateral.

•Our commercial real estate loans, including investor-owned and owner-occupied
categories, primarily represent multifamily and other commercial property loans
on which the primary source of repayment is income from the property. These
loans are principally underwritten based on the cash flow coverage of the
property, the Company's loan to value guidelines, and generally require either
the limited or full guaranty of principal sponsors of the credit. Commercial
real estate loans also represent owner-occupied C&I loans for which the primary
source of repayment is dependent on sources other than the underlying
collateral.

•Construction and land development loans relating primarily to residential and
commercial properties, represent financing secured by real estate under
development for eventual sale or undeveloped ground. At December 31, 2021,
$289.8 million of these loans include the use of interest reserves and follow
standard underwriting guidelines. Construction projects are monitored by the
loan officer and a centralized independent loan disbursement function is
employed.

•Residential real estate loans include residential mortgages, which are loans
that, due to size or other attributes, do not qualify for conventional home
mortgages available-for-sale in the secondary market, second mortgages and home
equity lines. Residential mortgage loans are usually limited to a maximum of 80%
of collateral value at origination.

Other loans are loans to individuals, loans to government and political departments, loans to non-custodian financial institutions and purchase loans or are fully collateralised by investment securities. Credit risk is managed by thoroughly checking borrowers’ creditworthiness before and after lending.

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The following table presents a breakdown of loans by NAICS code at December 31,
2021 and 2020:

                                                           December 31, 2021                       December 31, 2020
                                                   Outstanding                               Outstanding
($ in thousands)                                   Balance                    %                Balance                %
Accomodation and Food Services                     $     785,485                9  %       $     577,026                8  %
Administrative and Support and Waste Management
and Remediation Services                                    176,601             2  %                167,023             2  %
Agriculture, Forestry, Fishing and Hunting1                 195,342             2  %                207,335             3  %
Arts, Entertainment, and Recreation                         120,805             1  %                110,422             2  %
Construction                                                580,731             6  %                451,050             6  %
Educational Services                                         52,034             1  %                 53,708             1  %
Finance and Insurance                                     1,344,389            15  %              1,057,888            15  %
Health Care and Social Assistance                           372,109             4  %                320,556             4  %
Information                                                  64,686             1  %                 53,696             1  %
Management of Companies and Enterprises                      84,110             1  %                 54,563             1  %
Manufacturing                                               613,725             7  %                590,652             8  %
Mining, Quarrying, and Oil and Gas Extraction                 9,771             -  %                  3,375             -  %
Other Services (except Public Administration)               593,149             7  %                509,006             7  %
Professional, Scientific, and Technical Services            329,009             4  %                304,701             4  %
Public Administration                                        11,358             -  %                 13,811             -  %
Real Estate and Rental and Leasing                        2,462,088            27  %              1,722,630            24  %
Retail Trade                                                460,763             5  %                398,251             6  %
Transportation and Warehousing                              214,132             2  %                151,273             2  %
Utilities                                                    25,393             -  %                 19,321             -  %
Wholesale Trade                                             445,771             5  %                360,630             5  %
Other                                                        76,191             1  %                 98,018             1  %
Total Loans                                        $   9,017,642              100  %       $   7,224,935              100  %

1Includes $95.5 million in animal production and $92.1 million in plant cultivation December 31, 2021.

The table below shows a breakdown of commercial and industrial loans by size December 31, 2021.

($ in thousands)      Number of Loans      Outstanding Balance       Average Balance
<$2 million               3,326           $            921,537      $           277
$2-5 million                289                        915,656                3,168
$5-10 million                92                        627,728                6,823
>$10 million                 60                        927,454               15,458
Total                     3,767           $          3,392,375      $           901


The table below shows a breakdown of commercial real estate loans by size December 31, 2021.

($ in thousands)      Number of Loans      Outstanding Balance       Average Balance
<$2 million               3,300           $          1,840,760      $            558
$2-5 million                383                      1,184,292                 3,092
$5-10 million                90                        626,733                 6,964
>$10 million                 34                        525,143                15,445
Total                     3,807           $          4,176,928      $          1,097


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The following table presents a breakdown of construction loans by size at
December 31, 2021.

($ in thousands)      Number of Loans      Outstanding Balance       Average Balance
<$2 million                 539           $            212,129      $            394
$2-5 million                 63                        200,775                 3,187
$5-10 million                30                        206,262                 6,875
>$10 million                  8                        114,907                14,363
Total                       640           $            734,073      $          1,147



The following table presents a breakdown of residential loans by size at
December 31, 2021.

($ in thousands)      Number of Loans      Outstanding Balance       Average Balance
<$2 million               2,457           $            304,224      $           124
$2-5 million                 27                         83,666                3,099
$5-10 million                 8                         54,019                6,752
>$10 million                  1                         12,143               12,143
Total                     2,493           $            454,052      $           182



The following table presents a breakdown of other loans by size at December 31,
2021.

($ in thousands)      Number of Loans      Outstanding Balance       Average Balance
<$2 million               1,415           $            154,663      $           109
$2-5 million                 16                         43,306                2,707
$5-10 million                 7                         41,262                5,895
>$10 million                  2                         20,983               10,491
Total                     1,440           $            260,214      $           181


The table below shows a breakdown of total loans by geographic region
December 31, 2021:

                ($ in thousands)                    December 31, 2021
                St. Louis                        $        2,153,749
                Kansas City                                 785,342
                Arizona                                     545,362
                New Mexico                                  538,981
                California                                1,715,978
                Specialty, PPP and Other loans            3,278,230
                Total                            $        9,017,642





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The following table illustrates selected specialty lending detail, at
December 31, 2021 and 2020:

                                                                                                                         First Choice
                                           December 31,                                                                 Acquired Loans
($ in thousands)                     2021                 2020                Change               % Change               at 12/31/21
C&I                             $ 1,538,155          $ 1,103,060          $   435,095                    39.4  %       $      298,545
CRE investor owned                1,955,087            1,420,905              534,182                    37.6  %              553,986
CRE owner occupied                1,112,463              825,846              286,617                    34.7  %              290,876
SBA loans                         1,241,449              895,930              345,519                    38.6  %              164,094
Sponsor finance                     508,469              396,487              111,982                    28.2  %                    -
Life insurance premium
financing                           593,562              534,092               59,470                    11.1  %                    -
Tax credits                         486,881              382,602              104,279                    27.3  %                    -
SBA PPP loans                       271,958              698,645             (426,687)                  (61.1) %              149,334
Residential real estate             430,985              318,091              112,894                    35.5  %              151,970
Construction and land
development                         625,526              474,399              151,127                    31.9  %              173,969
Other                               253,107              174,878               78,229                    44.7  %               32,351
Total Loans                     $ 9,017,642          $ 7,224,935          $ 1,792,707                    24.8  %       $    1,815,125


The Sponsor Finance portfolio consists primarily of manufacturing and wholesale loans. It includes mid-market mergers and acquisitions, targeted private equity firms, primarily SBICs, and senior debt financings for portfolio companies.

The life insurance premium financing category specializes in financing whole life insurance premiums used in estate planning for high net worth individuals through end-to-end relationships with boutique estate planners The United States.

The tax credit portfolio includes tax credit-related lending on affordable
housing projects funded through the use of
federal and state low income housing tax credits. In addition, we provide
leveraged and other loans on projects funded through the CDFI New Markets Tax
Credit Program. This portfolio also includes tax credit brokerage through
10-year streams of Missouri state tax credits from affordable housing
development funds. The tax credits are sold to clients and other individuals for
tax planning purposes.

SBA 7(a) loans are primarily owner-occupied commercial real estate loans secured by a 1st lien. Most of these loans are 75% guaranteed by the SBA.

SBA PPP loans were granted in 2020 in response to the COVID-19 pandemic and are guaranteed by the SBA. The loans can be granted by the SBA if certain conditions are met.


Significant loan concentrations are considered to exist for a financial
institution when there are amounts loaned to numerous borrowers engaged in
similar activities that would cause them to be similarly impacted by economic or
other conditions. At December 31, 2021, no significant concentrations exceeding
10% of total loans existed in the Company's loan portfolio, except as described
above.

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The following table presents the maturity distribution of loans at December 31,
2021 categorized by fixed or variable interest rates, net of unearned loan fees:

                                   Due in One             After One              After Five
                                   Year or Less          Through Five         Through Fifteen              After                                      Percent of
($ in thousands)                       (1)                  Years                  Years               Fifteen Years             Total               Total Loans
Fixed Rate Loans
Commercial and industrial        $    135,942          $     549,283          $     278,445          $       15,871          $   979,541                       11  %
Real estate:
Commercial                            159,983              1,240,531                374,708                  24,532            1,799,754                       20  %
Construction and land
development                            57,205                143,742                  9,336                      89              210,372                        2  %
Residential                            24,272                 75,214                 13,377                  31,750              144,613                        2  %
Other                                   4,018                  9,019                 70,578                 114,154              197,769                        2  %
Total                            $    381,420          $   2,017,789          $     746,444          $      186,396          $ 3,332,049                       37  %
Variable Rate Loans
Commercial and industrial        $    976,252          $   1,217,215          $     206,655          $       12,712          $ 2,412,834                       27  %
Real estate:
Commercial                            191,202                414,017                450,615               1,321,340            2,377,174                       26  %
Construction and land
development                           164,306                171,528                 95,703                  92,164              523,701                        6  %
Residential                            32,458                 36,302                 76,791                 163,888              309,439                        3  %
Other                                   9,913                 12,726                 39,676                     130               62,445                        1  %
Total                            $  1,374,131          $   1,851,788          $     869,440          $    1,590,234          $ 5,685,593                       63  %
Total Loans
Commercial and industrial        $  1,112,194          $   1,766,498          $     485,100          $       28,583          $ 3,392,375                       38  %
Real estate:
Commercial                            351,185              1,654,548                825,323               1,345,872            4,176,928                       46  %
Construction and land
development                           221,511                315,270                105,039                  92,253              734,073                        8  %
Residential                            56,730                111,516                 90,168                 195,638              454,052                        5  %
Other                                  13,931                 21,745                110,254                 114,284              260,214                        3  %
Total                            $  1,755,551          $   3,869,577          $   1,615,884          $    1,776,630          $ 9,017,642                      100  %

(1) Includes loans with no stated maturity and overdraft facilities.

The majority of variable loans are based on the prime rate or LIBOR. At December
31, 2021, $3.2 billion or 57% of variable rate loans were subject to an interest
rate floor. Most loan originations have one-to three-year maturities. Management
monitors this mix as part of its interest rate risk management. See "Interest
Rate Risk" of this MD&A section.

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Provision and Allowance for Credit Losses
The adoption of CECL on January 1, 2020 increased the ACL on loans by $28.4
million, or 65%, and the allowance for unfunded commitments by $2.4 million as
compared to 2019. These increases were offset in retained earnings and did not
impact the consolidated statement of operations.



The provision for credit losses, which includes a provision for losses on
unfunded commitments, is a charge to earnings to maintain the ACL at a level
consistent with management's assessment of expected losses in the loan portfolio
at the balance sheet date. The Company also records reversals of interest on
nonaccrual loans and interest recoveries directly through the provision of
credit losses. CECL requires economic forecasts to be factored into determining
estimated losses. As a result, CECL will typically require a higher level of
provision at the start of an economic downturn. The decrease in the provision
for credit losses in 2021 was primarily due to a change in economic forecasts,
which has significantly improved since the start of the COVID-19 pandemic in
March 2020. Two of the primary economic loss drivers used in estimating the ACL
include the percentage change in GDP and unemployment. At December 31, 2021, the
Company's forecast of the percentage change in GDP included a range of (2.2)% to
6.7% and the percentage change in unemployment included a range of 3.0% to 8.7%.
At the beginning of the pandemic at March 2020, the forecast of the percentage
change in GDP included a range of (9.6)% to 2.1% and the percentage change in
unemployment included a range of 6.0% to 13.0%. The Company utilizes a one-year
reasonable and supportable forecast and a one-year reversion period.

In the acquisition of First Choice, we recognized an allowance of $7.6 million
on PCD loans and an allowance of $23.9 million on non-PCD loans. Similarly, in
the acquisition of Seacoast we recognized an allowance of $3.5 million on PCD
loans and $8.6 million on non-PCD loans. Pursuant to the CECL accounting
methodology, the allowance on PCD loans is recorded as part of the acquired loan
portfolio. The allowance on non-PCD loans is established through a charge to the
provision for credit losses in the post-combination financial statements.

To the extent the Company does not recognize charge-offs and economic forecasts
improve in future periods, the Company could recognize a reversal of provision
for credit losses. Conversely, if economic conditions and the Company's forecast
worsens, the Company could recognize elevated levels of provision for credit
losses. The provision is also reflective of charge-offs in the period.

The following table presents the components of the provision for credit losses
for the periods indicated:

                                                          December 31,
(in thousands)                                                    2021           2020
Provision (benefit) for loan losses                            $ (10,911)     $ 54,822
Provision on acquired loans                                       23,904    

8,557

Provision for off-balance sheet commitments1                       1,911    

2,877

Provision for held-to-maturity securities                            165    

147

Recovery of accrued interest                                      (1,684)   

(1,005)

Provision for credit losses                                    $  13,385    

$65,398

1 2021 includes $1.5 million within the framework of the obligations assumed by First Choice.

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The following table is a summary of the allocation of allowance for credit losses for the periods shown:

                                                                        December 31,
($ in thousands)                                        2021                                    2020
                                                        Percent of loans in                     Percent of loans in
                                                         each category to                        each category to

Balance at the end of the period Applicable to: Total loan amount

          Amount         total loans
Commercial and industrial                 $   63,825                37.6  %       $   58,812                42.8  %
Real estate:
Commercial                                    53,437                46.3  %           49,074                42.7  %
Construction and land development             14,536                 8.1  %           21,413                 7.6  %
Residential                                    7,927                 5.1  %            4,585                 4.4  %
Other                                          5,316                 2.9  %            2,787                 2.5  %

Total allowance                           $  145,041               100.0  %       $  136,671               100.0  %



The allowance for credit losses was 1.61% of total loans at December 31, 2021,
compared to 1.89%, and 0.81%, at December 31, 2020 and 2019, respectively. The
decline in the allowance to total loans ratio in 2021 was primarily due to the
comparatively lower ACL on the First Choice loan portfolio, net loan charge-offs
of $11.6 million, improved credit metrics, and continued improvement in economic
forecasts. The increase in the ratio in 2020 compared to 2019 was due to the
adoption of CECL and higher provision expense due to the pandemic, partially
offset by the acquisition of Seacoast and PPP loans which included $1.3 billion
in government-guaranteed loans with no allowance.

The following table is a summary of the net charge-offs (recoveries) on average loans for the periods shown:

                                                                                                          December 31,
                                                                     2021                                                                             2020
                                    Net Charge-offs                                 Net Charge-offs                 Net Charge-offs                                 Net Charge-offs
($ in thousands)                      (Recoveries)      Average Loans(1)      (Recoveries)/Average Loans              (Recoveries)      Average Loans(1)       (Recoveries)/Average Loans
Commercial and industrial          $        10,425    $       3,195,017                              0.33  %       $         3,533    $       2,917,784                               0.12  %
Real estate:
Commercial                                     810            3,586,773                              0.02  %                (2,607)           2,179,246                              (0.12) %
Construction and land development             (451)             673,646                             (0.07) %                  (136)             483,835                              (0.03) %
Residential                                    558              396,777                              0.14  %                   842              337,759                               0.25  %
Other                                          287              197,172                              0.15  %                   275              142,312                               0.19  %

Total                              $        11,629    $       8,049,385                              0.14  %       $         1,907    $       6,060,936                               0.03  %

(1) Excluding loans held for sale.

For more information on the credit loss allowance method, see “Critical Accounting Policies and Estimates” in this MD&A section.

Non-Performing Loans and Assets See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on non-performing loans and other properties.

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The following table shows the categories of non-performing assets excluding government-guaranteed interests:

                                                                                 December 31,
($ in thousands)                                                          2021                  2020
Non-accrual loans                                                    $     23,449          $    34,818
Loans past due 90 days or more and still accruing interest                  1,716                  130
Restructured loans                                                          2,859                3,559
Total nonperforming loans                                                  28,024               38,507
Other real estate                                                           3,493                5,330
Total nonperforming assets                                           $     31,517          $    43,837

Total assets                                                         $ 13,537,358          $ 9,751,571
Total loans                                                             9,017,642            7,224,935
Total allowance for credit losses                                         145,041              136,671

Allowance for credit losses to nonaccrual loans                               619  %               393  %
Allowance for credit losses to nonperforming loans                            518  %               355  %
Allowance for credit losses to total loans                                   1.61  %              1.89  %
Nonaccrual loans to total loans                                              0.26  %              0.48  %
Nonperforming loans to total loans                                           0.31  %              0.53  %

Nonperforming assets to total assets                                         0.23  %              0.45  %



Bad loans by loan type were as follows:


($ in thousands)                                 December 31, 2021              Number of loans              December 31, 2020              Number of 

loan

Commercial and industrial                  $  21,538               77  %               34              $  21,770               57  %               21
Commercial real estate                         4,414               16  %               14                 12,519               32  %               27

Residential real estate                        2,048                7  %               12                  4,189               11  %                3
Other                                             24                -  %                4                     29                -  %               33
Total                                      $  28,024              100  %               64              $  38,507              100  %               84


The following table summarizes the changes in non-performing loans:

                                                       Year ended December 

31,

      ($ in thousands)                                    2021             

2020

      Nonperforming loans, beginning of period   $      38,507            

$26,425

      Additions to nonaccrual loans                     43,350             
 30,424

      Charge-offs                                      (17,185)              (6,739)
      Principal payments                               (36,648)             (18,385)
      Nonperforming loans, end of period         $      28,024            

$38,507



Nonperforming loans at December 31, 2021 decreased $10.5 million, or 27%, when
compared to December 31, 2020. The decrease in nonperforming loans during 2021
was primarily from principal payments of $36.6 million and charge-offs of $17.2
million.

The Company implemented several loan programs to assist its customers impacted
by the COVID-19 pandemic, including providing short-term payment deferrals,
primarily for 90 days or less. As of December 31, 2021, substantially all of
these loans have returned to a paying status.

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Other real estate
Other real estate at December 31, 2021 and December 31, 2020 was $3.5 million
and $5.3 million, respectively.

The following table summarizes the development of other real estate:

                                                      Year ended December 31,
       ($ in thousands)                                  2021                2020
       Other real estate, beginning of period   $      5,330              
$ 6,344
       Additions                                       3,175                   756

       Writedowns in value                               (29)               (1,104)
       Sales                                          (4,983)                 (666)
       Other real estate, end of period         $      3,493              

$5,330

Fair value write-downs were recorded in loan, legal and other real estate expenses.

investments

At December 31, 2021, our portfolio of investment securities was $1.8 billion,
or 13%, of total assets, compared to $1.4 million, or 14%, of total assets as of
December 31, 2020. The portfolio is comprised of both available-for-sale and
held-to-maturity securities.

The table below sets forth the carrying value of investment securities held by
the Company:

                                                                                 December 31,
                                                                  2021                                   2020
($ in thousands)                                        Amount                %                Amount                %
Obligations of U.S. Government sponsored
enterprises                                         $   173,511               9.6  %       $    15,161               1.1  %
Obligations of states and political subdivisions        811,463              45.2  %           592,556              42.3  %
Agency mortgage-backed securities                       581,964              32.4  %           639,314              45.7  %
U.S. Treasury Bills                                      91,170               5.1  %            11,466               0.8  %
Corporate debt securities                               138,193               7.7  %           141,991              10.1  %

Total                                               $ 1,796,301             100.0  %       $ 1,400,488             100.0  %



The allowance for credit losses on held-to-maturity debt securities was
$0.6 million and $0.4 million at December 31, 2021 and 2020, respectively. The
Company had no debt securities classified as trading at December 31, 2021, or
2020.

The table below summarizes information on the expected life and tax-equivalent income of the investment portfolio December 31, 2021:

                                                        Within 1 year                       1 to 5 years                       5 to 10 years                       Over 10 years                          Total
($ in thousands)                                    Amount          Yield                Amount         Yield               Amount          Yield               Amount          Yield                       Amount        Yield
Obligations of U.S. Government-sponsored
enterprises                                    $            -            -  

% $142,292 1.03% $19,292 1.5%

    $       11,927        2.36  %                $   173,511        1.18  %
Obligations of states and political
subdivisions                                            1,048         4.39  %              22,870        2.35  %               39,607        2.88  %              747,938        2.71  %                    811,463        2.71  %
Agency mortgage-backed securities                      22,541         2.97  %             335,215        2.83  %              205,739        1.68  %               18,469        1.91  %                    581,964        2.40  %
U.S. Treasury Bills                                    80,961         0.07  %              10,209        2.47  %                    -           -  %                    -           -  %                     91,170        0.34  %
Corporate debt securities                                   -            -  %               5,181        3.28  %              133,012        3.37  %                    -           -  %                    138,193        3.37  %
Total                                          $      104,550         0.74  %       $     515,767        2.31  %       $      397,650        2.36  %       $      778,334        2.69  %                $ 1,796,301        2.39  %



Yields on tax-exempt securities are computed on a taxable equivalent basis using
a tax rate of 25.2%. Expected maturities will differ from contractual
maturities, as borrowers may have the right to call or repay obligations with or
without prepayment penalties.
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Other investments consist primarily of FHLB capital stock, common stock investments related to our Trust Preferred Securities, Community Development Funds and other investments in private equity funds, primarily SBICs.

                                                        December 31,
                                              2021                       2020
                ($ in thousands)       Amount          %          Amount          %
                FHLB capital stock   $ 12,075        20.2  %    $ 10,774        22.1  %
                Other investments      47,821        79.8  %      37,991        77.9  %
                Total                $ 59,896       100.0  %    $ 48,765       100.0  %


The table below summarizes information on the expected life and tax-equivalent income of other investments December 31, 2021:

                                               No Stated Maturity
                   ($ in thousands)            Amount            Yield
                   FHLB capital stock   $           12,075       4.13  %
                   Other investments                47,821       1.78  %
                   Total                $           59,896       2.25  %



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insoles

The table below shows the breakdown of the Company’s deposits by type:

                                                             Years ended December 31,           % Increase (decrease)
($ in thousands)                                            2021                  2020                                        2021 vs. 2020
Noninterest-bearing demand accounts                    $  4,578,436          $ 2,711,828                                              68.8  %
Interest-bearing demand accounts                          2,465,884            1,768,497                                              39.4  %
Money market accounts                                     2,890,976            2,327,066                                              24.2  %
Savings accounts                                            800,210              627,903                                              27.4  %
Certificates of deposit:
Brokered                                                    128,970               50,209                                             156.9  %
Other                                                       479,323              499,886                                              (4.1) %
Total deposits                                         $ 11,343,799          $ 7,985,389                                              42.1  %

Noninterest-bearing deposits / Total deposits                    40  %      

34%



The following table shows the average balance and average rate of the Company's
deposits by type:
                                                                                                        Years ended December 31,
                                                                  2021                                            2020                                            2019
                                                                           Average Rate                                    Average Rate                                    Average Rate
($ in thousands)                                  Average Balance              Paid               Average Balance              Paid               Average Balance              Paid
Noninterest-bearing deposit accounts            $      3,597,204                     -  %       $      1,854,982                     -  %       $      1,228,832                     -  %

Interest-bearing demand accounts                       2,122,752                  0.08  %              1,494,364                  0.14  %              1,286,641                  0.59  %
Money market accounts                                  2,557,836                  0.18                 1,977,826                  0.39                 1,608,349                  1.63
Savings accounts                                         724,768                  0.03                   589,832                  0.05                   489,310                  0.17
Certificates of deposit                                  570,496                  0.73                   676,889                  1.61                   799,079                  1.90
Total interest-bearing deposits                 $      5,975,852                  0.18          $      4,738,911                  0.44          $      4,183,379                  1.19

Total average deposits                          $      9,573,056                  0.11          $      6,593,893                  0.32          $      5,412,211                  0.92



Average total deposits were $9.6 billion for the year ended December 31, 2021,
an increase of $3.0 billion, or 45%, from December 31, 2020. The increase in
2021 was primarily due to the First Choice and Seacoast acquisitions and the
high level of liquidity in the economy. The increase in 2020 was primarily due
to the Seacoast acquisition and PPP loan fundings.

The table below shows the estimated uninsured certificates of deposit maturities as of December 31, 2021:

                    ($ in thousands)                    Total
                    Three months or less              $ 15,074
                    Over three through six months        9,098
                    Over six through twelve months      47,855
                    Over twelve months                  21,645
                    Total                             $ 93,672


away December 31, 2021totaled estimated uninsured deposits $5.9 billionincluding $93.7 million of certificates of deposit. at December 31, 2020totaled estimated uninsured deposits $3.3 billion.

                                       49
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Shareholders' equity
Shareholders' equity totaled $1.5 billion at December 31, 2021, an increase of
$450.1 million, or 42%, from December 31, 2020.

Significant activities in the past year December 31, 2021 Contain the following:

•increase from the issuance of approximately 7.8 million shares of common stock
for the First Choice acquisition reflecting $342.3 million of consideration;
•increase from net income of $133.1 million;
•increase from issuance of preferred stock of $72.0 million, net;
•decrease from share repurchases of $60.6 million, pursuant to the Company's
publicly-announced stock repurchase program;
•decrease from dividends paid on common stock of $26.2 million; and
•net decrease in fair value of available-for-sale securities and cash flow
hedges of $18.3 million.

liquidity and capital resources

liquidity

The objective of liquidity management is to ensure we have the ability to
generate sufficient cash or cash equivalents in a timely and cost-effective
manner to meet our commitments as they become due. Typical demands on liquidity
are changes in deposit levels, maturing time deposits which are not renewed, and
fundings under credit commitments to customers. Funds are available from a
number of sources, such as the core deposit base and loan and security
repayments and maturities.

Additionally, liquidity is provided from lines of credit with the FHLB, the
Federal Reserve, and correspondent banks; the ability to acquire large and
brokered deposits; sales of the securities portfolio; and the ability to sell
loan participations to other banks. These alternatives are an important part of
our liquidity plan and provide flexibility and efficient execution of the
asset-liability management strategy.

The Company's Asset-Liability Management Committee oversees our liquidity
position, the parameters of which are approved by the Bank's Board of Directors.
Our liquidity position is monitored daily. Our liquidity management framework
includes measurement of several key elements, such as a loan to deposit ratio, a
liquidity ratio, and a dependency ratio. The Company's liquidity framework also
incorporates contingency planning to assess the nature and volatility of funding
sources and to determine alternatives to these sources. While core deposits and
loan and investment repayments are principal sources of liquidity, funding
diversification is another key element of liquidity management and is achieved
by strategically varying depositor types, terms, funding markets, and
instruments.

Liquidity from assets is available primarily from cash balances and the
investment portfolio. Cash and interest-bearing deposits with other banks
totaled $2.0 billion at December 31, 2021, compared to $537.7 million at
December 31, 2020. The low interest rate environment, coupled with an uncertain
outlook and government stimulus, such as the PPP, has increased liquidity within
the banking industry, including the Company. Investment securities are another
important tool to the Company's liquidity objectives. Securities totaled
$1.8 billion at December 31, 2021, and included $753 million pledged as
collateral for deposits of public institutions, treasury, loan notes, and other
requirements. The remaining $1.0 billion could be pledged or sold to enhance
liquidity, if necessary.

Liability liquidity financing sources are available to increase financial flexibility. In addition to borrowed amounts at December 31, 2021the company could also borrow $709 million from the FHLB the Des Moines under lump sum loan commitments and has additional real estate loans of approx
$970.0 million that could be pledged. The company also has $1.1 billion
available at the federal reserve bank as part of a mortgage loan agreement. The company also has unsecured federal lines of credit with a total of six correspondent banks 90 million dollars.

                                       50
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In the normal course of business, the Company enters into certain forms of
off-balance sheet transactions, including unfunded loan commitments and letters
of credit. These transactions are managed through the Company's various risk
management processes. Management considers both on-balance sheet and off-balance
sheet transactions in its evaluation of the Company's liquidity. The Company has
$2.6 billion in unused commitments as of December 31, 2021. While this
commitment level would exhaust the majority the Company's current liquidity
resources, the nature of these commitments is such that the likelihood of
funding them in the aggregate at any one time is low.

At the holding company level, our primary funding sources are dividends and
payments from the Bank and proceeds from the issuance of equity (i.e. stock
option exercises, stock offerings) and debt instruments. The main use of this
liquidity is to provide the funds necessary to pay dividends to shareholders,
service debt, invest in subsidiaries as necessary, and satisfy other operating
requirements. In 2021, the holding company maintained a revolving line of credit
for an aggregate amount up to $25 million, all of which was available at
December 31, 2021. The line of credit has a one-year term that was renewed in
February 2022. The proceeds can be used for general corporate purposes.

The Company has an effective automatic shelf registration statement on Form S-3
allowing for the issuance of various forms of equity and debt securities. The
Company's ability to offer securities pursuant to the registration statement
depends on market conditions and the Company's continuing eligibility to use the
Form S-3 under rules of the SEC.

Strong capital ratios, credit quality and core earnings are essential to
retaining cost-effective access to the wholesale funding markets. Deterioration
in any of these factors could have a negative impact on the Company's ability to
access these funding sources and, as a result, these factors are monitored on an
ongoing basis as part of the liquidity management process. The Bank is subject
to regulations and, among other things, may be limited in its ability to pay
dividends or transfer funds to the parent company. Accordingly, consolidated
cash flows as presented in the consolidated statements of cash flows may not
represent cash immediately available for the payment of cash dividends to the
Company's shareholders or for other cash needs.

Through the normal course of operations, the Company has entered into certain
contractual obligations and other commitments. Such obligations relate to
funding of operations through deposits or debt issuances, as well as leases for
premises and equipment. As a financial services provider, the Company routinely
enters into commitments to extend credit. While contractual obligations
represent future cash requirements of the Company, a significant portion of
commitments to extend credit may expire without being drawn upon. Such
commitments are subject to the same credit policies and approval process
accorded to loans made by the Company. The Company also enters into derivative
contracts under which the Company either receives cash from or pays cash to
counterparties depending on changes in interest rates. Derivative contracts are
carried at fair value on the consolidated balance sheet with the fair value
representing the net present value of expected future cash receipts or payments
based on market interest rates as of the balance sheet date. The fair value of
these contracts changes daily as market interest rates change. For additional
information on the Company's contractual obligations and commitments see the
following footnotes in Item 8: "Note 6 - Leases," "Note 7 - Derivative Financial
Instruments," "Note 11 - Subordinated Debentures," "Note 12 - Federal Home Loan
Bank Advances," "Note 13 - Other Borrowings," and "Note 18 - Commitments."

Capital Resources
The Company and the Bank are subject to various regulatory capital requirements
administered by the state and federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory and possible additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the financial statements and results of operations of the
Company. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Company and its bank affiliate must meet specific
capital guidelines that involve quantitative measures of assets, liabilities,
and certain off-balance-sheet items as calculated under regulatory accounting
practices. The banking affiliate's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings and other factors.

                                       51
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Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the following table) of total and tier 1 capital to risk-weighted
assets, and of tier 1 capital to average assets. To be categorized as
"well-capitalized", banks must maintain minimum total risk-based (10%), tier 1
risk-based (8%), common equity tier 1 risk-based (6.5%), and tier 1 leverage
ratios (5%). As of December 31, 2021, and December 31, 2020, the Company and the
Bank met all capital adequacy requirements to which they are subject.

The Bank met the definition of "well-capitalized" at each of December 31, 2021
and 2020. Refer to "Item 8. Note 15 - Regulatory Capital" for a summary of our
risk-based capital and leverage ratios.

The following table summarizes the Company’s capital ratios:

                                         December 31, 2021                  December 31, 2020
                                                                                                                                  Minimum Ratio
($ in thousands)                        EFSC           Bank                EFSC          Bank            To Be Well-Capitalized     with CCB
Common Equity Tier 1 Capital to
Risk Weighted Assets                      11.3  %        12.5  %             10.9  %       12.5  %                        6.5  %          7.0  %
Tier 1 Capital to Risk Weighted
Assets                                    13.0  %        12.5  %             12.1  %       12.5  %                        8.0  %          8.5  %
Total Capital to Risk Weighted
Assets                                    14.7  %        13.5  %             14.9  %       13.7  %                       10.0  %         10.5  %
Leverage Ratio (Tier 1 Capital to
Average Assets)                            9.7  %         9.3  %             10.0  %       10.3  %                        5.0  %          4.0  %
Tangible common equity to tangible
assets1                                    8.1  %                             8.4  %
Common equity tier 1 capital       $ 1,091,823    $ 1,201,340          $  795,873    $  913,116
Tier 1 capital                       1,257,462      1,201,391             889,527       913,169
Total risk-based capital             1,423,036      1,303,715           1,094,601     1,004,839

1 Not a required regulatory
capital ratio



The Company believes the tangible common equity and regulatory capital ratios
are important measures of capital strength even though they are considered to be
non-GAAP measures. The tables included in this MD&A section under the caption
"Use of Non-GAAP Financial Measures" reconcile these ratios to U.S. GAAP.

Risk Management
Market risk arises from exposure to changes in interest rates and other relevant
market rate or price risk. The Company faces market risk in the form of interest
rate risk through transactions other than trading activities. Market risk from
these activities, in the form of interest rate risk, is measured and managed
through a number of methods. The Company uses financial modeling techniques to
measure interest rate risk. These techniques measure the sensitivity of future
earnings due to changing interest rate environments. Guidelines established by
the Bank's Asset/Liability Management Committee and approved by the Bank's Board
of Directors are used to monitor exposure of earnings at risk. General interest
rate movements are used to develop sensitivity as management believes it has no
primary exposure to a specific point on the yield curve. These limits are based
on the Company's exposure to immediate and sustained parallel rate movements,
either upward or downward. The Company does not have any direct market risk from
commodity exposures.

Interest Rate Risk
Our interest rate risk management practices are aimed at optimizing net interest
income, while guarding against deterioration that could be caused by certain
interest rate scenarios. Interest rate sensitivity varies with different types
of interest-earning assets and interest-bearing liabilities. We attempt to
maintain interest-earning assets, comprised primarily of both loans and
investments, and interest-bearing liabilities, comprised primarily of deposits,
maturing or repricing in similar time horizons in order to manage any impact
from market interest rate changes according to our risk tolerance. The Company
uses an earnings simulation model to measure earnings sensitivity to changing
rates.

                                       52
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The Company determines the sensitivity of its short-term future earnings to a
hypothetical plus or minus 100 to 300 basis point parallel rate shock through
the use of simulation modeling. The simulation of earnings includes the modeling
of the balance sheet as an ongoing entity. Future business assumptions involving
administered rate products, prepayments for future rate-sensitive balances, and
the reinvestment of maturing assets and liabilities are included. These items
are then modeled to project net interest income based on a hypothetical change
in interest rates. The resulting net interest income for the next 12-month
period is compared to the net interest income amount calculated using flat
rates. This difference represents the Company's earnings sensitivity to a
positive or negative parallel rate shock.

The table below summarizes the projected impact of interest rate shocks on net interest income December 31, 2021:

                                                                       Annual % change
Rate Shock1                                                         in net interest income
+ 300 bp                                                                    22.9%
+ 200 bp                                                                    14.1%
+ 100 bp                                                                     5.6%

1 Due to the current level of interest rates, the downward shock scenarios are not shown.



In addition to the rate shocks shown in the table above, the Company models net
interest income under various dynamic interest rate scenarios. In general,
changes in interest rates are positively correlated with changes in net interest
income.

The Company occasionally uses interest rate derivative instruments as an
asset/liability management tool to hedge mismatches in interest rate exposure
indicated by the net interest income simulation described above. They are used
to modify the Company's exposures to interest rate fluctuations and provide more
stable spreads between loan yields and the rate on their funding sources. At
December 31, 2021, the Company had $62.0 million in derivative contracts used to
manage interest rate risk. Derivative financial instruments are also discussed
in "Item 8. Note 7 - Derivative Financial Instruments."

The FCA has announced that the most common USD LIBOR settings (overnight,
1-month. 3-month, 6-month and 12-month) will cease publication after June 30,
2023. LIBOR is the most liquid and common interest rate index in the world and
is commonly referenced in financial instruments. The Federal Reserve's
Alternative Reference Rates Committee has proposed that SOFR replace LIBOR. The
Company expects to select a replacement index and provide customer notification
in early 2023, prior to the cessation of the USD LIBOR settings. While a
replacement index has not yet been selected, the Company ceased using LIBOR and
ICE swap rates in new contracts and began issuing SOFR based loans in December
2021.

We have exposure to LIBOR in various financial contracts. Instruments that may
be impacted include loans, securities, debt instruments and derivatives, among
other financial contracts indexed to LIBOR and that mature after December 31,
2021. We also have loans that are indirectly linked to LIBOR through reference
to the ICE swap rate. We have an internal working group composed of members from
legal, credit, finance, operations, risk and audit to monitor developments,
develop policies and procedures, assess the impact to the Company, consider
relevant options and to determine an appropriate replacement index for affected
contracts that expire after the expected discontinuation of LIBOR on June 30,
2023. We are actively working to amend and address impacted contracts to allow
for a replacement index. However, amending certain contracts indexed to LIBOR
may require consent from the counterparties which could be difficult and costly
to obtain in certain circumstances. As of December 31, 2021, the Company's
financial contracts indexed to LIBOR included $2.8 billion in loans (including
$618.4 million indirectly linked to LIBOR through reference to an ICE swap
rate), $125.3 million in borrowings, and $889.0 million (notional) in
derivatives.



In addition, LIBOR is used in the Company's analysis of the fair value of tax
credits and may be referenced in other financial contracts not included in the
discussion above.

                                       53
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The Company had $5.7 billion in variable rate loans as of December 31, 2021. Of
these loans, $3.2 billion have an interest rate floor and 95% of those loans
were at the floor. $2.8 billion in variable rate loans are indexed to LIBOR,
$2.4 billion are indexed to the prime rate, and $382.8 million are indexed to
other rates.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The following accounting policies are considered most critical to the
understanding of the Company's financial condition and results of operations.
These critical accounting policies require management's most difficult,
subjective and complex judgments about matters that are inherently uncertain.
Because these estimates and judgments are based on current circumstances, they
may change over time or prove to be inaccurate based on actual experience. In
the event that different assumptions or conditions were to prevail, and
depending upon the severity of such changes, the possibility of a materially
different financial condition and/or results of operations could reasonably be
expected. The impact and any associated risks related to our critical accounting
policies on our business operations are discussed throughout "Management's
Discussion and Analysis of Financial Condition and Results of Operations," where
such policies affect our reported and expected financial results. For a detailed
discussion on the application of these and other accounting policies, see "Item
8. Note 1 - Summary of Significant Accounting Policies."

The Company has prepared all of the consolidated financial information in this
report in accordance with GAAP. The Company makes estimates and assumptions that
affect the reported amount of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, and
the reported amounts of revenue and expenses during the reporting period. These
estimates and assumptions are based on management's best estimates and judgment.
Management evaluates its estimates and assumptions on an ongoing basis using
loss experience and other factors, including the current economic environment,
which management believes to be reasonable under the circumstances. We adjust
such estimates and assumptions when facts and circumstances dictate. As future
events and their effects cannot be determined with precision, actual results
could differ significantly from these estimates. Changes in estimates resulting
from continuing changes in the economic environment will be reflected in the
financial statements in future periods. There can be no assurances that actual
results will not differ from those estimates.

Allowance for Credit Losses
On January 1, 2020, the Company adopted Accounting Standard Update 2016-13
"Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments." This standard, referred to as CECL, requires an
estimate of lifetime expected credit losses on certain financial assets measured
at amortized cost.

The Company maintains separate allowances for funded loans, unfunded loans, and
held-to-maturity securities, collectively the ACL. The ACL is a valuation
account to adjust the cost basis to the amount expected to be collected, based
on management's estimate of experience, current conditions, and reasonable and
supportable forecasts. For purposes of determining the allowance for funded and
unfunded loans, the portfolios are segregated into pools that share similar risk
characteristics that are then further segregated by credit grades. Loans that do
not share similar risk characteristics are evaluated on an individual basis and
are not included in the collective evaluation. The Company estimates the amount
of the allowance based on loan loss experience, adjusted for current and
forecasted economic conditions, including unemployment, changes in GDP, and
commercial and residential real estate prices. The Company's forecast of
economic conditions uses internal and external information and considers a
weighted average of a baseline, upside, and downside scenarios. Because economic
conditions can change and are difficult to predict, the anticipated amount of
estimated loan defaults and losses, and therefore the adequacy of the allowance,
could change significantly and have a direct impact on the Company's credit
costs. The Company's allowance for credit losses on loans was $145.0 million at
December 31, 2021 based on the weighting of the different economic scenarios. As
a hypothetical example, if the Company had only used the upside scenario, the
allowance would have decreased $20.5 million. Conversely, the allowance would
have increased $43.9 million using only the downside scenario.

                                       54
--------------------------------------------------------------------------------

acquisitions

Acquisitions and Business Combinations are accounted for using the acquisition
method of accounting. The assets and liabilities of the acquired entities have
been recorded at their estimated fair values at the date of acquisition.
Goodwill represents the excess of the purchase price over the fair value of net
assets acquired, including the amount assigned to identifiable intangible
assets.

The purchase price allocation process requires an estimation of the fair values
of the assets acquired and the liabilities assumed. When a business combination
agreement provides for an adjustment to the cost of the combination contingent
on future events, the Company includes an estimate of the acquisition-date fair
value as part of the cost of the combination. To determine the fair values, the
Company relies on third party valuations, such as appraisals, or internal
valuations based on discounted cash flow analyses or other valuation techniques.
The results of operations of the acquired business are included in the Company's
consolidated financial statements from the respective date of acquisition.
Merger-related costs are costs the Company incurs to effect a business
combination. Merger-related expenses include costs directly related to merger or
acquisition activity and include legal and professional fees, system
consolidation and conversion costs, and compensation costs such as severance and
retention incentives for employees impacted by acquisition activity. The Company
accounts for merger-related costs as expenses in the periods in which the costs
are incurred and the services are received.

Income Taxes
Management uses certain assumptions and estimates in determining income taxes
payable or refundable for the current year, deferred income tax assets and
liabilities and income tax expense. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. If
current available information raises doubt as to the realization of the deferred
tax assets, a valuation allowance may be established. We consider the
determination of this valuation allowance to be a critical accounting policy
because of the need to exercise significant judgment in evaluating the amount
and timing of recognition of deferred tax liabilities and assets, including
projections of future taxable income. These judgments and estimates are reviewed
on a continual basis as regulatory and business factors change. A valuation
allowance for deferred tax assets may be required in the future if the amounts
of taxes recoverable through loss carry backs decline, if we project lower
levels of future taxable income, or we project lower levels of tax planning
strategies. Such valuation allowance would be established through a charge to
income tax expense that would adversely affect our operating results.

Effects of New Accounting Pronouncements
See "Item 8. Note 1 - Summary of Significant Accounting Policies - Recent
Accounting Pronouncements" for information on recent accounting pronouncements
and their impact, if any, on our consolidated financial statements.

Use of Non-GAAP Financial Measures
The Company's accounting and reporting policies conform to U.S. GAAP and the
prevailing practices in the banking industry. However, the Company provides
other financial measures, such as core efficiency ratio, tangible common equity
ratio, return on average tangible common equity, and tangible book value per
common share, in this report 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 core efficiency ratio, tangible common equity ratio,
return on average tangible common equity, and tangible book value per common
share, collectively "core performance measures" presented in this report, as
relevant 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, which
                                       55
--------------------------------------------------------------------------------

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 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. 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 measure for the
periods indicated.

                                       56
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Reconciliations of non-GAAP financial measures

Core Efficiency Ratio

                                                             For the Years ended December 31,
($ in thousands)                                      2021                  2020                2019
Net interest income                              $    360,194          $   270,001          $  238,717
Less incremental accretion income                           -                4,083               4,783
Core net interest income                              360,194              265,918             233,934

Total noninterest income                               67,743               54,503              49,176
Less gain on sale of other real estate                    884                    -                   -

Less other income from non-core acquired assets             -                    -               1,372
Less gain on sale of investment securities                  -                  421                 243

Less other non-core income                                  -                  265                 266
Core noninterest income                                66,859               53,817              47,295

Total core revenue                               $    427,053          $   319,735          $  281,229

Total noninterest expense                        $    245,919          $   167,159          $  165,485
Less merger-related expenses                           22,082                4,174              17,969

Less branch-closure expenses                            3,441                    -                   -

Less other non-core expenses                                -                   57                 257
Core noninterest expense                         $    220,396          $   162,928          $  147,259

Core efficiency ratio                                   51.61  %             50.96  %            52.36  %





Tangible Common Equity and Tangible Common Equity Ratio

                                                      For the Years ended December 31,
($ in thousands)                                  2021               2020              2019
Total shareholders' equity                   $  1,529,116       $ 1,078,975       $   867,185
Less preferred stock                               71,988                 -                 -
Less goodwill                                     365,164           260,567           210,344
Less intangible assets                             22,286            23,084            26,076
Tangible common equity                       $  1,069,678       $   795,324       $   630,765

Total assets                                 $ 13,537,358       $ 9,751,571       $ 7,333,791
Less goodwill                                     365,164           260,567           210,344
Less intangible assets                             22,286            23,084            26,076
Tangible assets                              $ 13,149,908       $ 9,467,920       $ 7,097,371

Tangible common equity to tangible assets            8.13  %           8.40  %           8.89  %



                                       57
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Return on the average tangible share capital

                                                    For the Years ended December 31,
($ in thousands)                                  2021             2020            2019
Average shareholder's equity                 $ 1,277,153       $ 902,875       $ 795,477
Less average preferred stock                       8,903               -               -
Less average goodwill                            307,614         217,205         193,804
Less average intangible assets                    22,460          23,551    

24,957

Average tangible common equity               $   938,176       $ 662,119    

$576,716

Net Income                                   $   133,055       $  74,384       $  92,739
Return on average tangible common equity           14.18  %        11.23  %        16.08  %



Tangible book value per common share

                                                    For the Years ended December 31,
($ and shares in thousands)                        2021             2020    

2019

Tangible Common Equity (calculated above) $1,069,678 $795,324

$630,765

Period end shares outstanding                        37,820         31,210  

26,543

Tangible book value per common share $28.28 $25.48

$23.76

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