Enterprise Financial Doubles Loan Growth After Deposit Rebound

The Tip Desk · October 27, 2026 · 3 min read

Loans rose $452.3 million to $12.3 billion and deposits $624.4 million to $15.1 billion as net interest income reached $174.6 million.

Enterprise Financial Services Corp (EFSC), a St. Louis–based regional lender, more than doubled its quarterly loan increase in the third quarter of 2026, adding $452.3 million to a $12.3 billion book after a $199.6 million rise in the second quarter.

The company said the step-up was concentrated in construction and land development, which rose 12%, life insurance premium financing, up 8%, and CRE investor owned, up 5%. Those three books together accounted for $310 million of the net increase. Loan production of $1.3 billion outpaced repayments of $800.7 million. Average loans were $12.1 billion, with the loan yield at 6.42%.

Deposits reversed a $21.8 million second-quarter decline, rising $624.4 million to $15.1 billion. Average deposits were $15.0 billion. Noninterest-bearing accounts were $5.0 billion, or 33% of the portfolio, and the loan-to-deposit ratio was 82%. The cost of total deposits was 1.54%.

Net interest income rose $5.9 million to $174.6 million, after a $2.6 million increase to $168.7 million in the prior quarter. The company attributed the linked-quarter gain to organic loan growth and one extra day, partly offset by higher interest-bearing liability balances. Net interest margin held at 4.30%, matching the second quarter and 7 bps above 4.23% a year earlier. Interest expense rose $3.0 million, which the company tied to the first full quarter of $175 million of subordinated debt issued in the second quarter and higher interest-bearing demand balances, partly offset by a $7.7 million redemption of 10.2% trust preferred securities. The rate on interest-bearing liabilities was 2.42%.

The provision for credit losses rose to $18.1 million from $14.2 million. The company said the increase was driven mainly by $11.0 million of net charge-offs, higher nonperforming loans and organic loan growth. Annualized net charge-offs were 36 bps of average loans, versus 46 bps in the linked quarter. Charge-offs included a $7.0 million C&I relationship in Missouri and a $2.6 million partial charge-off on a $15.5 million CRE foreclosure moved to OREO.

Nonperforming assets increased $22.4 million to $182.9 million, or 1.03% of total assets, versus 0.92% at June 30, 2026. The company said the rise was primarily $18.0 million of agricultural-related loans, a $7.5 million CRE relationship and a $4.1 million C&I relationship that went on nonaccrual. The allowance for credit losses to total loans was 1.17%, unchanged from the linked quarter.

Noninterest income was $13.2 million, down $0.3 million from the linked quarter, which the company attributed primarily to lower tax credit income and a net loss on OREO, partly offset by higher rental income. Noninterest expense was $114.7 million, down $1.1 million on lower employee compensation, partly offset by higher loan and legal expenses related to OREO and workouts.

Net income was $42.4 million, or $1.14 a share, compared with $1.09 in the linked quarter. Return on average assets was 0.95%. Pre-provision net revenue was $74.6 million.

The company returned $46.5 million to stockholders through $34.0 million of share repurchases of 525,767 shares and $12.5 million of common dividends, versus $22.9 million in the second quarter. The board raised the quarterly dividend $0.01 to $0.36 a share for the fourth quarter. Tangible common equity to tangible assets fell to 8.13% from 9.04% at June 30, 2026, and tangible book value per common share was $39.45. The company’s CET1 ratio was 11.1% and total risk-based capital 14.4%; Enterprise Bank & Trust remained well-capitalized with CET1 of 11.8% and total risk-based capital of 12.8%.