Enterprise Financial Services Corp (NASDAQ: EFSC) stock rose 2.35% on 18th January, 2019 (Source: Google finance) post the company posted better than expected results for the fourth quarter of 2018. The Company has reported a net income of $23.5 million for the quarter ended December 31, 2018, which is an increase 4%, compared to $22.5 million for the linked third quarter.
EFSC in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.06, beating the analysts’ estimates for the adjusted earnings per share of 95 cents, as per Zacks Investment Research. The company had reported the adjusted revenue of $61.3 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $59.4 million.
On November 1, 2018, EFSC and its wholly-owned subsidiary bank, Enterprise Bank & Trust, has signed a definitive agreement with Trinity Capital Corporation and its wholly-owned bank subsidiary, Los Alamos National Bank (“LANB”), according to which the Company will acquire Trinity and LANB. As per the terms of the definitive agreement, upon consummation of the proposed transaction, Trinity shareholders will receive 0.1972 shares of EFSC common stock and $1.84 in cash for each share of Trinity common stock they hold. LANB has approximately $1.3 billion in total assets and serves businesses and residents in Northern New Mexico and the Albuquerque metro area through its six full-service locations. The proposed transaction has been sanctioned by the Federal Deposit Insurance Corporation, and remains subject to the approval of Trinity’s shareholders. The company expects to close the proposed transaction in early 2019.
The company has declared the quarterly dividend of $0.14 per common share for the first quarter of 2019, which is an increase from $0.13 for the fourth quarter of 2018, payable on March 29, 2019 to shareholders of record as of March 15, 2019. In the fourth quarter of 2018, as part of its capital management efforts, the Company repurchased 299,510 shares of its common stock for $12.5 million.
The Company expects its effective tax rate for 2019 to be approximately 18% – 20%. EFSC expects to continue to invest in revenue producing associates and other infrastructure that supports additional growth. These investments are expected to result in expense growth, at a rate of 35% – 45% of projected revenue growth for 2019, resulting in continued improvements to the Company’s efficiency ratio, exclusive of the impact of the pending acquisition of Trinity and LANB.