What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-26 · 250 added, 225 removed, 1502 unchanged (24% of the section changed)

9 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and Board of Directors of Enterprise Financial Services Corp

To the shareholders and the Board of Directors of Enterprise Financial Services Corp

Opinion on the Consolidated Financial Statements

21 unchanged sentences

In determining the probability of default, the Company utilized a regression analysis to determine certain economic factors that are relevant loss drivers in the portfolio segments based on historical or peer evaluations.

Additionally, the Company applies qualitative adjustments to address risks not directly captured in the quantitative

Additionally, the Company applies qualitative adjustments to address risks not directly captured in the quantitative reserve;

including to address macroeconomic uncertainty by weighting the forecasted baseline, upside, and downside economic factors.

12 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and Board of Directors of Enterprise Financial Services Corp

To the shareholders and the Board of Directors of Enterprise Financial Services Corp

Opinion on Internal Control over Financial Reporting

24 unchanged sentences

As of December 31, 2024 and 2023

($ in thousands, except per share data) 2023 2022

($ in thousands, except share data) 2024 2023

Cash and due from banks $ 270,975 $ 193,275

25 unchanged sentences

Subordinated debentures and notes 156,551 155,984

FHLB advances — 100,000

Other borrowings 280,821 297,829

51 unchanged sentences

Professional fees 6,257 5,719 7,079

Branch-closure expenses — — 3,441

Merger-related expenses — — 22,082

Other expense 70,530 73,886 57,873

34 unchanged sentences

— — — — — — ( 33,602 ) — ( 33,602 )

Preferred stock dividends ($ 53.89 per share)

— — — — — — ( 4,041 ) — ( 4,041 )

Repurchase of common stock — — ( 700 ) ( 7 ) — ( 18,867 ) ( 14,049 ) — ( 32,923 )

Issuance under equity compensation plans, net — — 134 2 — 2,460 ( 689 ) — 1,773

Shares issued in connection with acquisition of First Choice Bancorp, net (gross issuance 7,808 shares)

— — 7,777 78 — 342,912 ( 710 ) — 342,280

Preferred stock issuance, net of $ 3,012 issuance cost

75 71,988 — — — — — — 71,988

Share-based compensation — — — — — 8,006 — — 8,006

Retirement of treasury stock ( 1,980 shares)

— — — ( 20 ) 73,528 ( 27,738 ) ( 45,770 ) — —

Balance December 31, 2022 75 $ 71,988 37,253 $ 373 $ — $ 982,660 $ 597,574 $ ( 130,332 ) $ 1,522,263

Net income — $ — — $ — $ — $ — $ 194,059 $ — $ 194,059

Other comprehensive loss — — — — — — — ( 149,109 ) ( 149,109 )

Other comprehensive income — — — — — — — 29,317 29,317

Common stock dividends ($ 1.00 per share)

2 unchanged sentences

— — — — — — ( 3,750 ) — ( 3,750 )

Repurchase of common stock — — ( 700 ) ( 7 ) — ( 18,867 ) ( 14,049 ) — ( 32,923 )

Issuance under equity compensation plans, net — — 163 1 — 2,402 ( 1,002 ) — 1,401

Share-based compensation — — — — — 10,146 — — 10,146

Retirement of treasury stock ( 1,980 shares)

— — — ( 20 ) 73,528 ( 27,738 ) ( 45,770 ) — —

Balance December 31, 2023 75 $ 71,988 37,416 $ 374 $ — $ 995,208 $ 749,513 $ ( 101,015 ) $ 1,716,068

Net income — $ — — $ — $ — $ — $ 185,266 $ — $ 185,266

Other comprehensive income — — — — — — — 29,317 29,317

Other comprehensive loss — — — — — — — ( 15,703 ) ( 15,703 )

Common stock dividends ($ 1.06 per share)

2 unchanged sentences

— — — — — — ( 3,750 ) — ( 3,750 )

Repurchase of common stock — — ( 627 ) ( 6 ) — ( 16,800 ) ( 12,835 ) — ( 29,641 )

Issuance under equity compensation plans, net — — 199 2 — 1,453 ( 1,015 ) — 440

13 unchanged sentences

Deferred income taxes ( 3,521 ) 2,380 2,194

Net amortization of debt securities 3,998 5,639 7,343

Net amortization (accretion) on loans 3,775 266 ( 1,140 )

Net amortization of discount/premiums on debt securities 4,090 3,998 5,639

Net amortization on loans 1,858 3,775 266

Amortization of intangible assets 3,834 4,601 5,367

2 unchanged sentences

Proceeds from mortgage loans sold 23,791 20,585 73,014

Loss (gain) on:

Investment securities ( 601 ) — —

Loans sold ( 2,015 ) — —

Other real estate ( 187 ) 93 ( 931 )

Fixed assets ( 46 ) ( 54 ) —

State tax credits ( 904 ) ( 1,506 ) ( 2,220 )

Asset impairment — — 3,441

Net loss (gain) on:

Sale of investment securities — ( 601 ) —

Sale of SBA loans ( 1,415 ) ( 2,015 ) —

Sale of other real estate ( 3,089 ) ( 187 ) 93

Sale of fixed assets — ( 46 ) ( 54 )

Sale of state tax credits ( 1,971 ) ( 904 ) ( 1,506 )

Share-based compensation 10,872 10,146 8,006

Changes in other assets and liabilities, net 8,714 ( 19,980 ) ( 17,262 )

Net changes in other assets and liabilities 23,349 8,714 ( 19,980 )

Net cash provided by operating activities 247,400 268,238 216,640

268,238 216,640 160,575

Cash flows from investing activities:

Proceeds from acquisitions, net — — 212,642

Net (increase) decrease in loans ( 1,238,276 ) ( 722,677 ) 138,455

Net increase in loans ( 398,223 ) ( 1,238,276 ) ( 722,677 )

Proceeds received from:

3 unchanged sentences

Redemption of other investments 68,678 92,879 12,989

Sale of loans 44,975 — —

Sale of SBA loans 25,090 44,975 —

Sale of state tax credits held for sale 10,405 4,592 20,645

9 unchanged sentences

Net cash used in investing activities ( 796,871 ) ( 1,307,782 ) ( 1,383,784 )

( 1,307,782 ) ( 1,383,784 ) ( 23,114 )

Year ended December 31,

1 unchanged sentence

Cash flows from financing activities:

Net (decrease) increase in noninterest-bearing deposit accounts $ ( 683,989 ) $ 64,296 $ 869,203

Net (decrease) increase in interest-bearing deposit accounts 2,031,210 ( 578,945 ) 648,778

Payments for the redemption of subordinated notes — — ( 50,000 )

Net increase (decrease) in noninterest-bearing deposit accounts $ 525,329 $ ( 683,989 ) $ 64,296

Net increase (decrease) in interest-bearing deposit accounts 444,792 2,031,210 ( 578,945 )

Net increase (decrease) in short term FHLB advances, net — ( 100,000 ) 100,000

1 unchanged sentence

Repayments of notes payable ( 11,429 ) ( 5,714 ) ( 5,714 )

Net (decrease) increase in other borrowings ( 20,576 ) ( 24,030 ) 59,925

Dividends paid on common stock ( 37,368 ) ( 33,602 ) ( 26,153 )

Repurchase of common stock — ( 32,923 ) ( 60,589 )

Dividends paid on preferred stock ( 3,750 ) ( 4,041 ) —

Proceeds from issuance of preferred stock, net — — 71,988

Other, net 1,401 1,773 516

Net decrease in other borrowings ( 5,579 ) ( 20,576 ) ( 24,030 )

Cash dividends paid on common stock ( 39,550 ) ( 37,368 ) ( 33,602 )

Cash dividends paid on preferred stock ( 3,750 ) ( 3,750 ) ( 4,041 )

Common stock repurchased ( 29,641 ) — ( 32,923 )

Other 440 1,401 1,773

Net cash provided by (used in) financing activities 880,612 1,181,214 ( 563,186 )

1,181,214 ( 563,186 ) 1,346,525

Net (decrease) increase in cash and cash equivalents 331,141 141,670 ( 1,730,330 )

6 unchanged sentences

Noncash investing and financing transactions:

Transfer to other real estate and repossessed assets owned in settlement of loans $ 6,933 $ — $ 3,227

Sales of other real estate financed — — 228

Transfer of securities from available-for-sale to held-to-maturity — 116,927 —

Transfer to loans from fixed assets for building sale and leaseback 1,460 — —

Transfer to other real estate owned in settlement of loans $ 6,559 $ 6,933 $ —

Right-of-use assets obtained in exchange for lease obligations 2,039 15,640 9,512

Transfer of loans from fixed assets for building sale and leaseback — 1,460 —

Transfer of securities from available for sale to held to maturity — — 116,927

Leasehold improvement allowance in other assets — 2,483 —

Common shares issued in connection with acquisitions — — 343,650

Transfer to investment securities in settlement of loans 10,448 — —

The accompanying notes are an integral part of these Consolidated Financial Statements.

4 unchanged sentences

Business and Consolidation

Enterprise is a financial holding company that provides a full range of banking and wealth management services to individuals and corporate customers primarily located in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico through its banking subsidiary, Enterprise Bank & Trust.

Enterprise is a financial holding company that provides a full range of banking and wealth management services to individuals and corporate customers primarily located in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico, and SBA loan and deposit productions offices throughout the country through its banking subsidiary, Enterprise Bank & Trust.

All intercompany accounts and transactions have been eliminated.

17 unchanged sentences

Recent Accounting Pronouncements

FASB ASU 2021-01, Reference Rate Reform (Topic 848):

Scope (ASU 2021-01) .

ASU 2021-01 was issued in January 2021 and provides optional expedients and exceptions in ASC 848 to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendment only applies to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The expedients and exceptions provided by the amendments will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

The amendments in this update were effective immediately upon issuance and did not have a material effect on the consolidated financial statements.

In December 2022, ASU 2022-06 Reference Rate Reform (Topic 848):

Deferral of the Sunset date of Topic 848 was issued, which extends the sunset date from December 31, 2022 to December 31, 2024.

FASB ASU 2022-02, Financial Instruments–Credit Losses (Topic 326);

Troubled Debt Restructurings and Vintage Disclosures.

ASU 2022-02 was issued in March 2022 and eliminates the accounting guidance on troubled

debt restructurings for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination.

The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

The amendments in this update will be effective for fiscal years beginning after December 15, 2022 for entities that have adopted the amendments in ASU 2016-13, Financial Instruments–Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments .

The adoption of ASU 2022-02 did not have a material effect on the consolidated financial statements.

FASB ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

1 unchanged sentence

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The Company has evaluated the accounting and disclosure requirements of ASU 2022-03 and does not expect them to have a material effect on the consolidated financial statements.

The adoption of ASU 2022-03 did not have a material effect on the consolidated financial statements.

FASB ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method .

ASU 2023-02 was issued in March 2023 to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits.

If certain conditions are met, a reporting entity may elect to account for its tax equity investments by using the proportional amortization method regardless of the program from which it receives income tax credits, instead of only low-income-housing tax credit (“LIHTC”) structures.

income-housing tax credit (“LIHTC”) structures.

This amendment also eliminates certain LIHTC-specific guidance aligning the accounting with other equity investments in tax credit structures.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The Company is evaluating the accounting and disclosure requirements of ASU 2023-02 and does not expect them to have a material effect on the consolidated financial statements.

The adoption of ASU 2023-02 did not have a material effect on the consolidated financial statements.

FASB ASU 2023-07, Improvements to Reportable Segment Disclosures .

4 unchanged sentences

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is evaluating the accounting and disclosure requirements of ASU 2023-07 and does not expect them to have a material effect on the consolidated financial statements.

The adoption of ASU 2023-07 did not have a material effect on the consolidated financial statements.

FASB ASU 2023-09, Income Tax Disclosures .

39 unchanged sentences

Interest on loans is accrued to income based on the principal balance outstanding.

The recognition of interest income is discontinued when a loan becomes 90 days past due or a significant deterioration in the borrower’s credit has occurred which, in management’s judgment, negatively impacts the collectibility of the loan.

The recognition of interest income is typically discontinued when a loan becomes 90 days past due or a significant deterioration in the borrower’s credit has occurred which, in management’s judgment, negatively impacts the collectibility of the loan.

Unpaid interest on such loans is reversed at the time the loan becomes uncollectible and subsequent interest payments received are generally applied to principal if any doubt exists as to the collectibility of such principal.

35 unchanged sentences

CRE – CRE loans include various types of loans for which the Company holds real property as collateral.

Commercial real estate lending activity is typically restricted to owner-occupied properties or to investor properties that are owned by customers with a current banking relationship.

Commercial real estate lending activity is typically restricted to owner-occupied properties or to investor properties

that are owned by customers with a current banking relationship.

The primary risks of CRE loans include the borrower’s inability to pay, material decreases in the value of the real estate being held as collateral and significant increases in interest rates, which may make the real estate mortgage loan unprofitable.

60 unchanged sentences

The Company tests goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate the Company may not be able to recover the respective asset’s carrying amount.

The Company’s annual test for impairment was performed in the fourth quarter of 2023.

The Company’s annual test for impairment was performed as of December 31, 2024.

Such tests involve the use of estimates and assumptions.

Potential impairments to goodwill must first be identified by performing a qualitative assessment which evaluates relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If this test indicates it is more likely than not that goodwill has been impaired, then a quantitative impairment test is completed.

If this test indicates it is more likely than not that goodwill has been impaired, then

a quantitative impairment test is completed.

The quantitative impairment test calculates the fair value of the reporting unit and compares it with its carrying amount, including goodwill.

28 unchanged sentences

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

The need for deferred tax asset valuation allowances is based on a more-likely-than-not standard.

The need for deferred tax asset valuation allowances is based on a more-likely-than-not

The ability to realize deferred tax assets depends on the ability to generate sufficient positive taxable income within the carryback or carryforward periods provided for in the laws for each applicable taxing jurisdiction.

9 unchanged sentences

A description of the Company’s share-based employee compensation plan is included in “Note 15 - Shareholders’ Equity and Compensation Plans.”

Specialty Deposits

The Company offers specialty deposit accounts to customers in certain industries, primarily community associations, property management, third party escrow, and trust services.

Deposit Verticals

The Company offers a deposit vertical platform to customers in certain industries, primarily community associations, property management, and legal industry and escrow services.

These customers will typically receive an earnings credit rate on average collected balances that is used to offset their cost of maintaining the deposit accounts.

14 unchanged sentences

These costs include items such as legal fees, title transfer fees, broker fees, etc.

Any goodwill and intangible assets associated with the portion of the reporting unit to be disposed of is included in the carrying amount of the business in determining the gain or loss on the sale.

Any goodwill and intangible assets

associated with the portion of the reporting unit to be disposed of is included in the carrying amount of the business in determining the gain or loss on the sale.

Basic and Diluted Earnings Per Common Share

18 unchanged sentences

Year ended December 31,

($ and shares in thousands, except per share data) 2023 2022 2021

(in thousands, except per share data) 2024 2023 2022

Net income available to common shareholders $ 181,516 $ 190,309 $ 199,002

6 unchanged sentences

NOTE 3 - INVESTMENTS

The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity:

The following table presents the amortized cost, gross unrealized gains and losses, allowance for credit losses and fair value of securities available-for-sale and held-to-maturity:

December 31, 2024

36 unchanged sentences

Total securities held-to-maturity, net $ 750,434

During 2023, the Company did no t transfer any securities from available-for-sale to held-to-maturity.

The Company believes the held-to-maturity category is consistent with the Company’s intent for these securities.

In 2022, the Company transferred $ 116.7 million of securities from available-for-sale to held-to-maturity.

The transfer of securities was made at fair value at the time of transfer.

The unamortized portion of the unrealized holding gain at the time of transfer is retained in accumulated other comprehensive income and in the carrying value of held-to-

maturity securities.

The Company did not transfer any securities from available-for-sale to held-to-maturity in 2024 or 2023.

The balance of held-to-maturity securities in the “Amortized Cost” column in the table above includes a cumulative net unamortized, unrealized gain of $ 10.8 million and $ 14.1 million at December 31, 2024 and 2023, respectively.

3 unchanged sentences

The agency mortgage-backed securities are all issued by U.S.

Government-sponsored enterprises.

Securities of $ 1.6 billion and $ 734.5 million at December 31, 2023 and December 31, 2022, respectively, were pledged as collateral to secure deposits of public institutions and for other purposes as required by law or contract provisions.

Government agencies and sponsored enterprises.

Securities of $ 1.5 billion and $ 1.6 billion at December 31, 2024 and December 31, 2023, respectively, were pledged as collateral to secure deposits of public institutions and for other purposes as required by law or contract provisions, in addition to collateral securing borrowing bases with the FHLB and the Federal Reserve Bank.

The amortized cost and estimated fair value of debt securities at December 31, 2024, by contractual maturity, are shown below.

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The weighted average life of the mortgage-backed securities is approximately 5 years.

The weighted average life of the mortgage-backed securities is approximately five years .

Available-for-sale Held-to-maturity

36 unchanged sentences

The proceeds, gross gains and losses realized from sales of available-for-sale investment securities were as follows:

($ in thousands) 2023 2022 2021

Twelve months ended

($ in thousands) December 31, 2024 December 31, 2023 December 31, 2022

Gross gains realized $ — $ 601 $ —

21 unchanged sentences

At December 31, 2024 and 2023, loans of $ 5.7 billion and $ 4.8 billion, respectively, were pledged to the FHLB and the Federal Reserve.

The Company had no consumer mortgage loans secured by residential real estate in process of foreclosure as of December 31, 2024.

Consumer mortgage loans secured by residential real estate in process of foreclosure totaled $ 1.0 million at December 31, 2023.

There were no consumer mortgage loans secured by residential real estate in process of foreclosure at December 31, 2022.

Loans to executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director totaled $ 0.1 million and $ 0.1 million for the year ended December 31, 2023 and 2022, respectively.

Loans to executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director were immaterial and $ 0.1 million for the years ended December 31, 2024 and 2023, respectively.

Such loans were made in the normal course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers and did not involve more than the normal risk of collectibility.

1 unchanged sentence

($ in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Other Total

Balance at December 31, 2021

Allowance for credit losses on loans:

1 unchanged sentence

Provision (benefit) for credit losses ( 6,121 ) 46 4,867 ( 3,145 ) 540 ( 397 ) ( 4,210 )

Initial allowance on acquired PCD loans 1,077 3,651 1,504 37 — 737 7,006

Charge-offs ( 6,082 ) ( 478 ) ( 395 ) — ( 2,068 ) ( 370 ) ( 9,393 )

1 unchanged sentence

Balance, end of year $ 53,835 $ 36,191 $ 22,752 $ 11,444 $ 7,928 $ 4,782 $ 136,932

Balance at December 31, 2022

Allowance for credit losses on loans:

4 unchanged sentences

Balance, end of year $ 58,886 $ 31,280 $ 23,405 $ 10,198 $ 6,142 $ 4,860 $ 134,771

Balance at December 31, 2023

Allowance for credit losses on loans:

4 unchanged sentences

Balance, end of year $ 63,231 $ 34,217 $ 20,400 $ 9,837 $ 6,534 $ 3,731 $ 137,950

The Company recorded a provision for credit losses on loans of $ 35.9 million and a provision benefit for credit losses of $ 4.2 million for the years ended December 31, 2023 and 2022, respectively.

The Company recorded a provision for credit losses on loans of $ 20.6 million and $ 35.9 million for the years ended December 31, 2024 and 2023, respectively.

An additional provision for credit losses of $ 0.9 million and $ 0.7 million was recorded in 2024 and 2023, respectively, for securities, unfunded commitments and accrued interest on nonaccrual loans.

Acquisition-related provision expense of $ 25.4 million in 2021 was 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.

The CECL methodology incorporates various economic scenarios.

The Company utilizes three forecasts in the model;

Moody’s baseline, a stronger near-term growth upside and a moderate recession downside forecast.

Moody’s baseline, a stronger near-term growth upside and a moderate downside forecast.

The Company weights these scenarios at 40 %, 30 %, and 30 %, respectively, which added approximately $ 14.8 million to the ACL over the baseline model at December 31, 2024.

The forecasts at the end of 2023 incorporate an expectation that the federal funds rate has peaked at the range of 5.25% to 5.50% and will begin falling in the latter half of 2024.

It is also assumed that the bank failures in early 2023 were not an indication of a broader problem in the industry.

The forecasts at the end of 2024 incorporate an expectation that the federal funds rate will continue to fall in 2025.

The Company has also recognized various risks posed by loans in certain segments, including the commercial office sector, by allocating additional reserves to those segments.

Some of the key risks to the forecasts that could result in future provision for credit losses are market reactions to the Federal Reserve policy actions that could push the economy into a recession, persistently higher inflation, tightening in the credit markets, and further weakness in the financial system.

Some of the key risks to the forecasts that could result in future provision for credit losses are market reactions to the Federal Reserve policy actions that could push the economy into a recession, persistently higher inflation (including the impact of tariffs), tightening in the credit markets, and further weakness in the financial system.

In addition to the CECL methodology, the Company incorporates qualitative adjustments into the ACL on loans to capture credit risks inherent within the loan portfolio that are not captured in the DCF model.

2 unchanged sentences

Of this amount, $ 14.5 million was allocated to Sponsor Finance loans due to their unsecured nature.

G ross charge-offs by loan class and year of origination is presented in the following table:

Gross charge-offs by loan class and year of origination is presented in the following table:

December 31, 2024

3 unchanged sentences

Commercial - investor owned — — — 252 — 448 — — 700

Commercial - owner occupied — — 41 475 10 2,548 — — 3,074

Construction and land development — — — — 3,224 — — — 3,224

4 unchanged sentences

Total gross charge-offs $ 21,874

December 31, 2023

Term Loans by Origination Year

($ in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Converted to Term Loans Revolving Loans Total

Commercial and industrial $ 600 $ 2,999 $ 1,940 $ 2,539 $ — $ — $ 12,533 $ 15,178 $ 35,789

Commercial - investor owned — — 170 — 4,692 7 — — 4,869

Construction and land development — — — — — 9 — — 9

Residential — — — — — 480 176 — 656

Other — 3 459 — — 319 12 — 793

Total charge-offs by origination year $ 600 $ 3,002 $ 2,569 $ 2,539 $ 4,692 $ 815 $ 12,721 $ 15,178 $ 42,116

Total gross charge-offs by performing status 1,099

Total gross charge-offs $ 43,215

The following tables present the recorded investment in nonperforming loans by category, excluding government guaranteed balances:

December 31, 2024

($ in thousands) Non-accrual Restructured, accruing Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance

($ in thousands) Non-accrual Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance

Commercial and industrial $ 15,810 $ 11 $ 15,821 $ 4,279

6 unchanged sentences

December 31, 2023

($ in thousands) Non-accrual Restructured, accruing Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance

($ in thousands) Non-accrual Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance

Commercial and industrial $ 7,641 $ 115 $ 7,756 $ 6,179

14 unchanged sentences

Commercial - owner occupied 7,521 482 486 —

Construction and land development 528 741 — —

Residential — 959 — —

Total $ 21,657 $ 482 $ 4,765 $ 3,495

1 unchanged sentence

Type of Collateral

($ in thousands) Commercial Real Estate Residential Real Estate Blanket Lien

($ in thousands) Commercial Real Estate Residential Real Estate Blanket Lien Other

Commercial and industrial $ 527 $ 1,864 $ 344 $ 3,445

46 unchanged sentences

If the borrower continues to experience financial difficulty, another concession, such as an interest rate reduction or principal forgiveness, may be granted.

The following table shows the recorded investment at the end of the reporting period for loans modified to borrowers experiencing financial difficulty, disaggregated by loan class and type of concession granted:

The following tables show the recorded investment at the end of the dates listed for loans modified to borrowers experiencing financial difficulty, disaggregated by loan class and type of concession granted:

Term Extension Payment Delay Total

Twelve months ended Twelve months ended Twelve months ended

($ in thousands) December 31,

2024 Percent of Total Loan Class December 31,

2024 Percent of Total Loan Class

Commercial and industrial $ 43,094 0.91 % $ 567 0.01 % $ 43,661 0.92 %

Commercial - investor owned 256 0.01 % — — % 256 0.01 %

Commercial - owner occupied 12,890 0.54 % — — % 12,890 0.54 %

Residential 69 0.02 % — — % 69 0.02 %

Total $ 56,309 0.50 % $ 567 0.01 % $ 56,876 0.51 %

Term Extension

7 unchanged sentences

Total $ 57,684

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty and outstanding at the end of the year:

The Company had $ 3.3 million in commitments to lend additional funds to borrowers experiencing financial difficulty included in the previous table at December 31, 2024.

There were $ 6.6 million and $ 0.7 million of loans modified to borrowers experiencing financial difficulty that were also included in nonperforming loans, excluding government guaranteed balances, as of December 31, 2024 and December 31, 2023, respectively.

The following tables summarize the financial impacts of loan modifications made to borrowers experiencing financial difficulty and outstanding at the date indicated:

Weighted Average Term Extension (in months) Amount of Payment Delay

Twelve months ended Twelve months ended

($ in thousands) December 31, 2024 December 31, 2024

Commercial and industrial 6 $ 85

Commercial - investor owned 12 —

Commercial - owner occupied 22 —

Residential 24 —

Weighted Average Term Extension (in months)

6 unchanged sentences

Residential 3

The following table shows the aging of the recorded investment in modified loans by class:

The following tables show the aging of the recorded investment in modified loans in the last 12 months by class at the date indicated:

December 31, 2024

5 unchanged sentences

Commercial - owner occupied 11,972 — 918 12,890

Residential 69 — — 69

Total $ 54,540 $ 567 $ 1,769 $ 56,876

December 31, 2023

($ in thousands) Current 30-89 Days

Past Due 90 or More

Past Due Total

Commercial and industrial $ 39,187 $ 250 $ — $ 39,437

Commercial - investor owned 9,411 — — 9,411

Commercial - owner occupied — 94 — 94

Construction and land development 1,137 — — 1,137

2 unchanged sentences

Total $ 57,262 $ 422 $ — $ 57,684

As of December 31, 2023, no loans experienced a default subsequent to being granted a term extension modification in the prior twelve months.

The following table summarizes loans that experienced a default during the twelve months ended December 31, 2024, subsequent to being granted a modification in the preceding twelve months.

All of these loans were charged-off during the preceding period.

Default is defined as movement to nonperforming status, foreclosure or charge-off.

As of December 31, 2023, the Company allocated an immaterial amount in specific reserves to loans that have been restructured.

Term Extension

Twelve months ended

($ in thousands) December 31, 2024 Percent of Total Loan Class

Commercial and industrial $ 1,000 0.02 %

Total $ 1,004

There were no loans that experienced a default during the twelve months ended December 31, 2023 subsequent to being granted a modification in the preceding twelve months.

As of December 31, 2024 and December 31, 2023, the Company allocated an immaterial amount in specific reserves to loans that have been restructured.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors.

109 unchanged sentences

Most of the leases expire between 2025 and 2029 and include one or more renewal options for up to 5 years.

Five leases expire between 2030 and 2034.

Six leases expire between 2030 and 2034.

All leases are classified as operating leases.

22 unchanged sentences

The Company leases office space to a third party through an operating lease.

This lease has remaining lease terms of two years .

Lessor income was $ 1.8 million and $ 1.9 million for the twelve months en ded December 31, 2023, and 2022.

This lease has remaining lease terms of 18 months.

Lessor income was $ 1.9 million and $ 1.8 million for the twelve months ended December 31, 2024, and 2023, respectively.

NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS

10 unchanged sentences

For hedges of the Company’s variable-rate loans, interest rate swaps designated as cash flow hedges involve the receipt of fixed amounts and the Company making variable rate payments.

In the fourth quarter 2022, the Company executed a cash flow hedge to reduce a portion of variability in cash flows on the Company’s prime based loan portfolio.

The interest rate swap has a notional value of $ 100.0 million, that effectively fixes the interest rate at 6.63 % for the notional amount and has a maturity date of January 1, 2028.

In January 2023, the Company entered into another hedge on the prime based loan portfolio with a notional value of $ 50.0 million, that effectively fixes the interest rate at 6.56 % for the notional amount and has a maturity date of February 1, 2027.

In addition, the Company executed a prime based interest rate collar in the fourth quarter of 2022 with a notional amount of $ 100.0 million.

The Company has executed cash flow hedges to reduce a portion of variability in cash flows on the Company’s prime based loan portfolio.

Select terms of the hedges are as follows:

($ in thousands)

Notional Fixed Rate Effective Date Maturity Date

$ 50,000 6.56 % January 25, 2023 February 1, 2027

$ 100,000 6.63 % December 20, 2022 January 1, 2028

$ 100,000 6.66 % April 1, 2025 April 1, 2030

The Company executed a prime based interest rate collar in the fourth quarter of 2022 with a notional amount of $ 100.0 million.

The collar includes a cap of 8.14 % and a floor of 5.25 %.

This transaction, commonly referred to as a zero cost collar, involves the Company selling an interest rate cap where payments will be made when the index exceeds the cap rate, and the purchase of a floor where payments will be received if the index falls below the floor.

The collar matures on October 1, 2029.

The Company also executed a 1-month SOFR based interest rate collar in the fourth quarter of 2024 with a notional amount of $ 50.0 million.

The collar includes a cap of 4.21 % and a floor of 3.23 %.

The collar matures on November 1, 2029.

These transactions are commonly referred to as zero cost collars, which involves the Company selling an interest rate cap where payments will be made when the index exceeds the cap rate, and the purchase of a floor where payments will be received if the index falls below the floor.

For hedges of the variable-rate liabilities, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

5 unchanged sentences

$ 13,506 2.64 % March 17, 2026

$ 18,558 2.64 % March 15, 2026

$ 13,506 2.64 % March 17, 2026

The gain or loss on derivatives designated and qualified as cash flow hedges of interest rate risk are recorded in accumulated other comprehensive income and subsequently reclassified into interest income or expense in the same period(s) during which the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income or expense as interest payments are paid on the Company’s variable-rate loans and debt.

During the next twelve months, the Company estimates an

additional $ 0.9 million will be reclassified as a decrease to interest expense and $ 1.7 million will be reclassified as a decrease to interest income.

During the next twelve months, the Company estimates $ 0.6 million will be reclassified as a decrease to interest expense and $ 1.2 million will be reclassified as a decrease to interest income.

Non-designated Hedges

3 unchanged sentences

As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings as a component of other noninterest income.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31st of the year presented.

Notional Amount Derivative Assets Derivative Liabilities

($ in thousands) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022

($ in thousands) 2024 2023 2024 2023 2024 2023

Derivatives designated as hedging instruments

Interest rate swaps $ 282,064 $ 211,962 $ 649 $ 1,389 $ 3,139 $ 233

Interest rate collar 100,000 100,000 514 — — 48

Interest rate collars 150,000 100,000 — 514 1,056 —

Total $ 432,064 $ 311,962 $ 649 $ 1,903 $ 4,195 $ 233

1 unchanged sentence

Interest rate swaps $ 854,171 $ 779,152 $ 14,495 $ 15,886 $ 14,497 $ 15,951

Derivative assets are classified on the Balance Sheet in other assets.

Derivative liabilities are classified on the Balance Sheet in other liabilities.

The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s financial instruments subject to offsetting.

The gross amounts of assets or liabilities can be reconciled to the tabular disclosure of fair value.

The tabular disclosure of fair value provides the location that financial assets and liabilities are presented on the Balance Sheet.

The fair value table above provides the location that financial assets and liabilities are presented on the Balance Sheet.

As of December 31, 2024

2 unchanged sentences

Interest rate swaps $ 15,144 $ — $ 15,144 $ 4,975 $ 9,710 $ 459

Interest rate collar 514 — 514 — — 514

Interest rate swaps $ 17,636 $ — $ 17,636 $ 4,975 $ — $ 12,661

Interest rate collars 1,056 — 1,056 — — 1,056

Securities sold under agreements to repurchase 244,618 — 244,618 — 244,618 —

3 unchanged sentences

Interest rate swaps $ 17,275 $ — $ 17,275 $ 1,105 $ 16,170 $ —

Interest rate swaps $ 21,533 $ — $ 21,533 $ — $ — $ 21,533

Interest rate collar 514 — 514 — — 514

Interest rate swaps $ 16,184 $ — $ 16,184 $ 1,105 $ — $ 15,079

Securities sold under agreements to repurchase 250,197 — 250,197 — 250,197 —

11 unchanged sentences

Total fixed assets $ 45,009 $ 42,681

Depreciation and amortization of fixed assets included in noninterest expense amounted to $ 5.1 million, $ 5.6 million, and $ 6.1 million in 2023, 2022, and 2021, respectively.

Depreciation and amortization of fixed assets included in noninterest expense amounted to $ 5.1 million, $ 5.1 million , $ 5.6 million in 2024, 2023, and 2022, respectively.

In 2023, the Company completed an asset sale-leaseback on a branch location in the Kansas City market and recorded a gain of $ 0.1 million.

In 2021 the Company commenced the process to close three branch locations in California related to the First Choice acquisition.

A lease and fixed asset impairment charge of $ 0.4 million was recognized and reported in merger-related expenses.

Additionally, the Company also commenced the process to close two branches in St.

Louis and consolidate the operations and customers of these branches with other nearby locations.

An impairment charge of $ 3.4 million on these branches was recognized in 2021 for buildings, leases and fixed assets.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

20 unchanged sentences

$ 484,588 $ 885,016 $ 1,369,604

Certificates of deposit balances over the FDIC insurance limit of $250,000 were $ 234.6 million as of December 31, 2023.

At December 31, 2023, deposit accounts of executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director totaled $ 2.6 million.

Certificates of deposit balances over the FDIC insurance limit of $250,000 were $ 268.2 million and $ 234.6 million as of December 31, 2024 and 2023, respectively.

At December 31, 2024 and 2023, deposit accounts of executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director totaled $ 0.9 million and $ 2.6 million, respectively.

The Company is a participant in certain networks that offer deposit placement services on a reciprocal basis that qualify large deposits for FDIC insurance.

The Company had $ 91.7 million and $ 10.6 million of certificates of deposits, and $ 1.1 billion and $ 195.1 million of demand deposits in these reciprocal accounts at December 31, 2023 and 2022, respectively.

The Company had $ 96.6 million and $ 91.7 million of certificates of deposits, and $ 1.2 billion and $ 1.1 billion of demand deposits in these reciprocal accounts at December 31, 2024 and 2023, respectively.

At December 31, 2024 and 2023, overdraft deposits of $ 17.2 million and $ 1.6 million, respectively, were reclassified to loans.

1 unchanged sentence

The following table summarizes the Company’s subordinated debentures at December 31:

Amount Maturity Date Initial Call Date (1) Interest Rate

Amount Maturity Date Initial Call Date (1)

Interest Rate

($ in thousands) 2024 2023

8 unchanged sentences

JEFFCO Stat Trust I 7,732 7,732 February 22, 2031 February 22, 2011 Fixed @ 10.20 %

JEFFCO Stat Trust II (2) 4,604 4,550 March 17, 2034 March 17, 2009 Floats @ 3 month term SOFR + 2.75 %

Trinity Capital Trust III (2) 5,473 5,406 September 8, 2034 September 8, 2009 Floats @ 3 month term SOFR + 2.70 %

JEFFCO Stat Trust II (2)

4,658 4,604 March 17, 2034 March 17, 2009 Floats @ 3 month term SOFR + 3.01 %

Trinity Capital Trust III (2)

5,539 5,473 September 8, 2034 September 8, 2009 Floats @ 3 month term SOFR + 2.96 %

Trinity Capital Trust IV 10,310 10,310 November 23, 2035 August 23, 2010 Fixed @ 6.88 %

Trinity Capital Trust V (2) 8,195 8,032 December 15, 2036 September 15, 2011 Floats @ 3 month term SOFR + 1.65 %

Trinity Capital Trust V (2)

8,358 8,195 December 15, 2036 September 15, 2011 Floats @ 3 month term SOFR + 1.91 %

Total junior subordinated debentures 93,404 93,121

17 unchanged sentences

Interest on the subordinated debentures held by the trusts is recorded as interest expense in the Company’s Consolidated Statements of Income.

The Company’s investment in these trusts of $ 2.9 million at December 31, 2023 is included in other investments in the consolidated balance sheets.

The Company has fixed the interest rate on a portion of its junior subordinated debentures through a series of

interest rate swaps.

The Company’s investment in these trusts of $ 2.9 million at December 31, 2024 and 2023 is included in other investments in the consolidated balance sheets.

The Company has fixed the interest rate on a portion of its junior subordinated debentures through a

series of interest rate swaps.

For further discussion of the interest rate swaps and the corresponding terms, see “Note 6 – Derivative Financial Instruments.”

On November 1, 2016, the Company issued $ 50 million of fixed-to-floating rate subordinated notes.

The notes initially bore a fixed annual interest rate of 4.75 %, with interest payable semiannually in arrears on May 1 and November 1 of each year, commencing May 1, 2017.

On November 1, 2021, the Company redeemed the $ 50.0 million of subordinated debentures at par.

A loss of $ 0.7 million on the redemption was recognized for the write-off of unamortized debt issuance costs.

On May 21, 2020, EFSC issued $ 63.3 million of 5.75 % fixed-to-floating rate subordinated notes due in 2030 in a public offering (the “2030 Notes”).

7 unchanged sentences

FHLB advances are collateralized by 1-4 family residential real estate loans, business loans, and certain commercial real estate loans.

At December 31, 2023 and 2022, the carrying value of the loans pledged to the FHLB of Des Moines was $ 1.9 billion and $ 1.4 billion, respectively.

The loans are pledged to the secured line of credit to maintain the borrowing base, which had availability of approximately $ 1.0 billion at December 31, 2023.

The following table summarizes the Company’s FHLB advances at December 31:

($ in thousands) Outstanding Balance Weighted Rate Outstanding Balance Weighted Rate

Non-amortizing fixed advance $ — — % $ 100,000 4.57 %

At December 31, 2024 and 2023, the unpaid principal of the loans pledged to the FHLB of Des Moines was $ 2.6 billion and $ 1.9 billion, respectively.

The loans are pledged to the secured line of credit to maintain the borrowing base, which had availability of approximately $ 1.3 billion and $ 1.0 billion at December 31, 2024 and 2023, respectively.

The Company did not have any FHLB advances at December 31, 2024 or 2023.

NOTE 12 - OTHER BORROWINGS

11 unchanged sentences

Average balance during the year 164,959 168,745

Maximum balance outstanding at any month-end 250,197 284,269

Maximum balance outstanding at any month-end during the year 244,618 250,197

Average interest rate during the year 3.44 % 2.16 %

Average interest rate at December 31 3.56 % 1.44 %

Average interest rate at the year ended 3.09 % 3.56 %

Federal Reserve Line

The Bank also has a line with the Federal Reserve Bank of St.

Louis which provides additional liquidity to the Company.

As of December 31, 2023, $ 2.5 billion was available under this line.

Included in this line is $ 215.0 million related to the Bank Term Funding program.

On January 24, 2024, the Federal Reserve announced that the program would cease making new loans on March 11, 2024.

This line is secured by a pledge of certain eligible loans and securities aggregating $ 2.9 billion.

There were no amounts drawn on the Federal Reserve line of credit as of December 31, 2023.

Louis which provides additional liquidity.

As of December 31, 2024 and 2023, $ 2.8 billion and $ 2.5 billion, respectively, was available under this line.

This line was secured by a pledge of certain eligible loans and securities aggregating $ 3.2 billion and $ 2.9 billion, at December 31, 2024 and 2023, respectively.

Included in the line at December 31, 2023 was $ 215.0 million related to the Bank Term Funding program that ended on March 11, 2024.

There were no amounts drawn on the Federal Reserve line of credit as of December 31, 2024 or 2023.

Other Borrowings

The Bank has $ 36.2 million of borrowings from various entities related to New Market Tax Credit investments.

The Company had $ 36.2 million of borrowings from various entities related to New Market Tax Credit investments at December 31, 2024 and 2023.

These notes have remaining terms that range from 24 - 29 years.

2 unchanged sentences

In February 2016, the Company entered into a senior unsecured revolving credit agreement (the “Revolving Agreement”) with another bank.

The Revolving Agreement has a one-year term, maturing on February 22, 2024, allows for borrowings up to $ 25 million, and had an interest rate of one-month Term SOFR plus 136 basis points until February 2024.

A fee of 0.30 % annually is assessed against the unused commitment.

The proceeds can be used for general corporate purposes.

The Revolving Agreement is subject to ongoing compliance with a number of customary affirmative and negative covenants as well as specified financial covenants.

The Revolving Agreement had a one-year term that matured on February 22, 2025, allowed for borrowings up to $ 25 million, and had an interest rate of one-month Term SOFR plus 185 basis points until February 2025.

A fee of 0.40 % annually was assessed against the unused commitment.

The proceeds could be used for general corporate purposes.

The Revolving Agreement was subject to ongoing compliance with a number of customary affirmative and negative covenants as well as specified financial covenants.

The revolving credit line was not accessed in 2024 or 2023.

2 unchanged sentences

In February 2022, the interest rate on the Term Loan was amended to one-month Term SOFR plus 136 basis points.

The term loan agreement matures in February 2024.

The term loan agreement matured in February 2024 and was not renewed.

A summary of the Term Loan is as follows:

6 unchanged sentences

NOTE 13 - LITIGATION AND OTHER CONTINGENCIES

The Company and its subsidiaries are, from time to time, parties to various legal proceedings arising out of their businesses.

Management believes there are no such legal proceedings pending or threatened against the Company or its subsidiaries in the ordinary course of business, directly, indirectly, or in the aggregate that, if determined adversely, would have a material adverse effect on the business, consolidated financial condition, results of operations or cash flows of the Company or any of its subsidiaries.

The Company, from time to time, is a party to various legal proceedings arising out of its businesses.

Management believes there are no such legal proceedings pending or threatened against the Company in the ordinary course of business, directly, indirectly, or in the aggregate that, if determined adversely, would have a material adverse effect on the business, consolidated financial condition, results of operations or cash flows of the Company.

NOTE 14 - REGULATORY CAPITAL

6 unchanged sentences

The capital ratios are presented in the following table:

December 31, 2023 December 31, 2022

EFSC Bank EFSC Bank To Be Well-Capitalized Minimum Ratio

6 unchanged sentences

At December 31, 2024 and 2023, the Company has reserved the following shares of its authorized but unissued common stock for possible future issuance in connection with the following:

December 31, 2023 December 31, 2022

Outstanding performance units (maximum issuance) 363,070 273,202

6 unchanged sentences

Common Stock Repurchase Plan

In April 2021, the Company’s board of directors authorized the repurchase of up to two million shares of the Company’s common stock.

As of May 2022, this plan was depleted.

In May 2022, the Company’s board of directors authorized the repurchase of up to two million shares of the Company’s common stock.

The repurchases may be made in open market or privately negotiated transactions and the stock repurchase program will remain in effect until fully utilized or until modified, superseded or terminated.

At December 31, 2023, there were two million shares available for repurchase under the plan.

At December 31, 2024, there were 1,373,222 shares available for repurchase under the plan.

Preferred Stock

10 unchanged sentences

Quarterly dividends have been declared and paid in all periods since the preferred stock was issued.

Dividends on the Company’s capital stock are prohibited under the terms of the junior subordinated debenture agreements, see “Note 10 – Subordinated Debentures and Notes,” if the Company is in continuous default on its payment obligations to the capital trusts, has elected to defer interest payments on the debentures or extends the

interest payment period.

Furthermore, unless dividends on all outstanding shares of the Series A Preferred Stock for the most recently completed dividend period have been paid or declared, dividends on, and repurchases of, common stock is prohibited.

5 unchanged sentences

Net change ( 149,623 ) ( 2,696 ) 3,210 ( 149,109 )

Transfer from available-for-sale to held-to-maturity ( 197 ) 197 — —

Balance, December 31, 2022 $ ( 144,549 ) $ 13,185 $ 1,032 $ ( 130,332 )

Net change 31,705 ( 2,605 ) 217 29,317

Transfer from available-for-sale to held-to-maturity ( 197 ) 197 — —

Balance, December 31, 2023 $ ( 112,844 ) $ 10,580 $ 1,249 $ ( 101,015 )

6 unchanged sentences

Reclassification of gain on sale of available-for-sale securities (a)

— — — ( 601 ) ( 151 ) ( 450 ) — — —

Reclassification of gain on held-to-maturity securities (a)

( 3,314 ) ( 822 ) ( 2,492 ) ( 3,483 ) ( 878 ) ( 2,605 ) ( 3,605 ) ( 909 ) ( 2,696 )

Change in unrealized gain (loss) on cash flow hedges ( 6,949 ) ( 1,723 ) ( 5,226 ) ( 656 ) ( 165 ) ( 491 ) 3,741 943 2,798

Reclassification of loss on cash flow hedges (b)

1,731 428 1,303 945 237 708 551 139 412

Total other comprehensive income (loss) $ ( 20,883 ) $ ( 5,180 ) $ ( 15,703 ) $ 39,193 $ 9,876 $ 29,317 $ ( 199,343 ) $ ( 50,234 ) $ ( 149,109 )

2 unchanged sentences

Compensation Plans

The Company has adopted share-based compensation plans to reward and provide long-term incentive for directors and key employees of the Company including its subsidiaries.

The Company has adopted share-based compensation plans to reward and provide long-term incentive for directors and key employees of the Company.

These plans provide for the granting of stock, stock options, stock-settled stock appreciation rights, and restricted stock units (“RSUs”), and may contain performance terms for key employees as designated by the Company’s Board of Directors upon the recommendation of the Compensation Committee of the Board.

The Company uses authorized and unissued shares to satisfy share award exercises.

The total excess income tax benefit (expense) for share-based compensation arrangements was $ 0.3 million, $ 0.1 million, and $( 0.1 ) million for the years ended December 31, 2023, 2022, and 2021, respectively.

The total excess income tax benefit for share-based compensation arrangements was immaterial for the year ended December 31, 2024, and $ 0.3 million and $ 0.1 million for the years ended December 31, 2023, and 2022, respectively.

At December 31, 2024, there was $ 14.0 million of total unrecognized compensation cost related to unvested share-based compensation awards.

The cost is expected to be recognized over a weighted-average term of approximately 2 years.

The cost is expected to be recognized over a weighted-average term of approximately one year .

The following table summarizes share-based compensation expense:

For the year ended December 31,

($ in thousands) 2024 2023 2022

17 unchanged sentences

Weighted average grant date fair value (per share) $ 51.91 $ 62.19 $ 38.84

Maximum Shares Issuable

Maximum Shares Issuable Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023

273,202 $ 54.82

Granted 166,692 38.84

Vested (issued 64,582 shares)

( 76,824 ) 47.16

Outstanding at December 31, 2024

363,070 $ 49.10

Restricted Stock Units

5 unchanged sentences

Various information related to the RSUs is shown below.

($ in thousands) 2023 2022 2021

At or for the year ended December 31,

($ in thousands except per unit data) 2024 2023 2022

Total fair value of awards vesting during the year $ 4,919 $ 3,894 $ 3,888

1 unchanged sentence

Expected years to recognize unearned compensation 1.5 years 1.7 years 2.0 years

Weighted average grant date fair value $ 50.46 $ 47.96 $ 44.01

Weighted average grant date fair value per unit $ 41.52 $ 50.46 $ 47.96

A summary of the status of the Company’s RSU awards as of December 31, 2024 and changes during the year then ended is presented below.

1 unchanged sentence

Outstanding at December 31, 2023

290,141 $ 48.69

Granted 140,359 41.52

2 unchanged sentences

Outstanding at December 31, 2024

297,122 $ 46.07

Stock Options

6 unchanged sentences

The dividend yield is determined by annualizing the dividend rate as a percentage of the Company's stock price.

The following weighted average assumptions were used for grants issued during the year ended December 31, 2023.

The following weighted average assumptions were used for grants issued during the years ended December 31, 2024, 2023, and 2022.

Weighted Average

For the year ended December 31,

2024 2023 2022

Risk Free Interest Rate 4.27 % 4.09 % 1.95 %

9 unchanged sentences

Outstanding at December 31, 2023

333,608 $ 49.11

Granted 204,853 39.50

1 unchanged sentence

Forfeited ( 15,216 ) 45.84

Outstanding at December 31, 2023 333,608 $ 49.11 8.2 years

Exercisable at December 31, 2023 53,208 $ 45.30 7.5 years

Outstanding at December 31, 2024

510,812 $ 45.43 8.0 years

Exercisable at December 31, 2024

140,375 $ 46.02 6.6 years

The intrinsic value of options exercised totaled $ 0.7 million and $ 0.1 million in 2024 and 2023, respectively.

The intrinsic value of options outstanding, expected to vest, and exercisable totaled $ 5.6 million, $ 5.6 million, and $ 1.5 million, respectively, in 2024.

In 2023, the intrinsic value of options outstanding and expected to vest totaled $ 1.5 million, and the intrinsic value of options exercisable was immaterial.

Employee Stock Purchase Plan

7 unchanged sentences

Various information related to the Director Plan is shown below.

At or for the year ended December 31,

2024 2023 2022

30 unchanged sentences

Federal tax credits ( 5,619 ) ( 4,364 ) ( 3,661 )

Non-taxable donation to charitable foundation — — ( 263 )

Other, net ( 119 ) ( 306 ) 57

Total income tax expense $ 45,978 $ 52,467 $ 56,417

The net amount recognized as a component of tax expense for tax credits, other tax benefits, and amortization from LIHTC investments recognized per the table above was immaterial for the year ended December 31, 2023, and $ 0.2 million and $ 0.1 million for the years ended December 31, 2022, and December 31, 2021, respectively.

The net amount recognized as a component of tax expense for tax credits, other tax benefits, and amortization from LIHTC investments recognized per the table above was immaterial for the years ended December 31, 2024 and December 31, 2023, and $ 0.2 million for the year ended December 31, 2022.

As of December 31, 2024 and 2023, the carrying value of the investments related to low-income housing tax credits was $ 16.7 million and $ 17.2 million, respectively.

16 unchanged sentences

Fixed assets 2,802 2,341

Deferred expenses 3,021 1,158

Other deferred tax assets 3,248 3,665

15 unchanged sentences

The company determined it was more likely than not that some of the acquired net operating loss and tax credit assets would not be realized and has recognized a valuation allowance of $ 2.8 million at December 31, 2024 and 2023, respectively.

The Company and its subsidiaries file income tax returns in the federal jurisdiction and in thirty-two states.

The Company and its subsidiaries file income tax returns in the federal jurisdiction and in thirty-one states and localities.

The Company is no longer subject to federal, state or local income tax audits by tax authorities for years before 2019, with the exception of 2016 and 2017 being open years by state taxing authorities.

1 unchanged sentence

As of December 31, 2024, the gross amount of unrecognized tax benefits was $ 5.0 million and the total amount of net unrecognized tax benefits that would impact the effective tax rate, if recognized, was $ 4.0 million compared to $ 2.4 million and $ 2.2 million as of December 31, 2023 and 2022, respectively.

The Company believes it is reasonably possible the gross amount of unrecognized benefits will be reduced by approximately $ 0.4 million as a

result of a lapse of statute of limitations in the next 12 months.

The Company is under audit by the state of Missouri, and while the Company has concluded it has adequately provided for uncertain tax positions, the outcome of such audits are always uncertain and could result in additional tax expense, though immaterial.

The Company believes it is

reasonably possible the gross amount of unrecognized benefits will be reduced by approximately $ 0.3 million as a result of a lapse of statute of limitations in the next 12 months.

The Company is under audit by the state of California, Missouri, and Texas, and while the Company has concluded it has adequately provided for uncertain tax positions, the outcome of such audits are always uncertain and could result in additional tax expense, though immaterial.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense and classifies such interest and penalties in the liability for unrecognized tax benefits.

The amount accrued for interest and penalties was $ 1.0 million for 2023, $ 0.6 million as of 2022, and $ 0.5 million for 2021.

The amount accrued for interest and penalties was $ 2.1 million as of 2024, $ 1.0 million as of 2023, and $ 0.6 million as of 2022.

The activity in the gross liability for unrecognized tax benefits was as follows:

26 unchanged sentences

Of the total commitments to extend credit at December 31, 2024, and December 31, 2023, $ 156.5 million and $ 191.6 million, respectively, represent fixed rate loan commitments.

Since certain of the commitments may expire without being drawn upon or may be revoked, the total commitment amounts do not necessarily represent future cash obligations.

Since certain of the commitments may expire without being drawn upon or may be revoked, the

total commitment amounts do not necessarily represent future cash obligations.

The Company evaluates each customer’s credit worthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary by the

Company upon extension of credit, is based on management’s credit evaluation of the borrower.

The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower.

Collateral held varies, but may include accounts receivable, inventory, premises and equipment, and real estate.

16 unchanged sentences

December 31, 2024

($ in thousands) Quoted Prices in

Active Markets

for Identical

(Level 1) Significant

(Level 2) Significant

(Level 3) Total Fair

($ in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs

(Level 3) Total Fair Value

Securities available-for-sale

2 unchanged sentences

Obligations of states and political subdivisions — 409,197 — 409,197

Residential mortgage-backed securities — 700,381 — 700,381

Agency mortgage-backed securities — 1,027,394 — 1,027,394

Corporate debt securities — 20,746 — 20,746

17 unchanged sentences

Obligations of states and political subdivisions — 432,171 — 432,171

Residential mortgage-backed securities — 659,404 — 659,404

Agency mortgage-backed securities — 700,381 — 700,381

Corporate debt securities — 181,701 — 181,701

31 unchanged sentences

These are considered Level 3 inputs.

• Loan servicing asset .

The loan servicing asset is included in Other assets on the Company’s consolidated balance sheets and assessed for impairment on a quarterly basis.

Market-based cash flow modeling and discounting models specific to the SBA industry are provided by a third-party valuation service and are considered Level 2 inputs.

The following tables present financial instruments and non-financial assets still held as of the reporting date measured at fair value on a non-recurring basis.

12 unchanged sentences

(Level 2) Significant

Individually-evaluated loans $ 5,138 $ — $ — $ 5,138

Other real estate 5,736 — — 5,736

Loan servicing asset 1,027 — 1,027 —

Total $ 10,874 $ — $ — $ 10,874

7 unchanged sentences

Balance sheet assets

Securities held-to-maturity $ 750,434 $ 696,647 Level 2 $ 709,915 $ 628,517 Level 2

Securities held-to-maturity, net $ 928,935 $ 858,871 Level 2 $ 750,434 $ 696,647 Level 2

Other investments 69,801 69,801 Level 2 63,255 63,255 Level 2

6 unchanged sentences

Subordinated debentures and notes 156,551 155,102 Level 2 155,984 154,354 Level 2

FHLB advances — — Level 2 100,000 100,004 Level 2

Other borrowings 280,821 258,461 Level 2 297,829 274,658 Level 2

9 unchanged sentences

In addition, these estimates do not reflect any premium or discount that could result from offering for sale the Company’s entire holdings of a particular financial instrument at one time.

Fair value estimates are based on existing on-balance and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not

considered financial instruments.

In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in many of the estimates.

In addition, the tax ramifications related to the realization of the unrealized gains

and losses can have a significant effect on fair value estimates and have not been considered in many of the estimates.

NOTE 19 - PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS

38 unchanged sentences

Net cash provided by operating activities 103,947 44,519 77,074

44,519 77,074 87,868

Cash flows from investing activities:

Proceeds from acquisitions, net of cash acquired — — 2,346

Cash proceeds from subsidiaries 2,188 — —

Purchases of other investments ( 1,216 ) ( 1,002 ) ( 2,187 )

1 unchanged sentence

Net cash provided by investing activities 3,521 2,312 1,691

2,312 1,691 2,798

Cash flows from financing activities:

Payments for the redemption of subordinated notes — — ( 50,000 )

Repayment of long-term debt ( 11,429 ) ( 5,714 ) ( 5,714 )

Dividends paid on common stock ( 39,550 ) ( 37,368 ) ( 33,602 )

Payments for the repurchase of common stock — ( 32,923 ) ( 60,589 )

Proceeds from issuance of preferred stock — — 71,988

Repurchase of common stock ( 29,641 ) — ( 32,923 )

Dividends paid on preferred stock ( 3,750 ) ( 3,750 ) ( 4,041 )

1 unchanged sentence

Net cash used in financing activities ( 83,930 ) ( 45,431 ) ( 74,507 )

( 45,431 ) ( 74,507 ) ( 71,381 )

Net increase in cash and cash equivalents 23,538 1,400 4,258

1 unchanged sentence

Cash and cash equivalents, end of year $ 123,956 $ 100,418 $ 99,018

Supplemental disclosures of cash flow information:

Noncash transactions:

Common shares issued in connection with acquisitions $ — $ — $ 343,650

NOTE 20 - SUPPLEMENTAL FINANCIAL INFORMATION

The following table presents other income and other expense components that primarily exceed one percent of the aggregate of total interest income and noninterest income in one or more of the periods indicated:

The following table presents other income and other expense components, including items that exceed one percent of the aggregate of total interest income and noninterest income in one or more of the periods indicated:

Year ended December 31,

1 unchanged sentence

Other income:

Community development fees $ 4,037 $ 5,304 $ 5,491

Bank-owned life insurance $ 3,737 $ 3,688 $ 3,324

Community development fees 2,440 4,037 5,304

Net gain (loss) on sales of other real estate owned 3,089 187 ( 93 )

Other income 12,721 15,000 8,182

5 unchanged sentences

Loan, legal expenses 8,749 8,639 6,943

Outside services 7,040 5,399 4,992

Other professional services 6,671 7,040 5,399

Other expenses 29,706 32,332 25,854

Total other noninterest expenses $ 70,530 $ 73,886 $ 57,873

NOTE 21 - SEGMENT REPORTING

The Company has determined it has one operating and reportable segment.

The economic characteristics, including the nature, the type or class of customer, and the nature of the regulatory environment of the products, services and business lines of the Company are all similar.

The Company provides a full range of banking services, including mortgage, tax credit brokerage, wealth management and traditional banking services, to individuals and corporate customers.

Refer to “Item 8.

Note 1 – Summary of Significant Accounting Policies” for the accounting policies of the Company.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The operating results that are regularly reviewed by the CODM are the consolidated results of the Company.

The CODM uses the consolidated results of the Company in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for acquisitions or to pay dividends.

The CODM assesses performance for the segment and decides how to allocate resources based on net income, reported on the income statement as consolidated net income.

The CODM is provided with the consolidated financial statement package on a monthly basis.

The Company considered the following factors, among others, in determining significant segment expenses:

the magnitude of the expense item and its relevance to the segment’s performance, the variability and volatility of the expense item, and whether the expenses are used by the CODM.

The Company’s significant segment revenues and expenses that are regularly provided to the CODM, including the Company’s profit or loss, have been included within the primary financial statements and notes thereto.

Refer to “Item 8.

Consolidated Financial Statements” and “Item 8.

Note 20 - Supplemental Financial Information” for these figures.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data