EFSCP · Enterprise Financial Services Corp

Enterprise Financial Services Corp reported first quarter 2026 net income of $49.4 million, or $1.30 per diluted share, representing a decrease of $5.4 million from the linked quarter. The decline was primarily driven by a $2.0 million decrease in net interest income due to a lower day count and a $6.3 million decrease in noninterest income, largely attributable to the absence of a gain on OREO recognized in the prior quarter and seasonally lower tax credit income. Noninterest expense increased $0.6 million linked-quarter, primarily due to the reset of payroll tax limits and paid time-off accruals.

Net interest margin demonstrated resilience, expanding two basis points to 4.28% despite a 175 basis point reduction in the federal funds target rate since September 2024. Management proactively adjusted deposit pricing, reducing the total cost of deposits by 12 basis points linked-quarter to 1.52%, which partially offset the impact of lower asset yields. Average loan yields declined 13 basis points, while investment securities yields increased 11 basis points. The Company opportunistically sold $25.4 million of SBA guaranteed loans for a gain of $1.4 million.

Asset quality metrics improved during the quarter. The ratio of nonperforming assets to total assets declined to 0.87% from 0.95% in the linked quarter, and the allowance for credit losses to total loans increased to 1.21% from 1.19%. The provision for credit losses was $7.2 million, down from $9.2 million in the prior quarter. Net charge-offs totaled $4.4 million.

Capital return remained a priority, with the Company repurchasing 483,000 shares for $27.3 million and increasing the quarterly dividend by $0.01 to $0.34 per share. Tangible book value per common share increased 7% year-over-year to $41.38. President and CEO Jim Lally highlighted a stable net interest margin, improved credit quality, and a strong balance sheet as key drivers of the solid start to 2026.