Good day and welcome to the Enterprise Financial Services Corp Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Peter Benoist. Please go ahead, sir.

Thank you, Stephanie, and thanks to all of you for joining our call this afternoon. With me on the call today are Scott Goodman, President of Enterprise Bank & Trust; and Keene Turner, our Chief Financial Officer. We’ve initiated a webcast format beginning with this earnings call and refer you to our corporate website for a copy of the accompanying presentation which will be the subject of the call. The presentation and earnings release were furnished on SEC Form-8K earlier today. Please refer to Slide number 1 of the presentation titled Forward-Looking Statement and most recent 10-K and 10-Q for reasons why actual results may vary from any forward looking statement we made today. Over the past several quarters we’ve attempted to highlight the elements of the company’s core performance and focus our discussion primarily around those trends. We believe over the long term continued attention to our core operating fundamentals will result in significant shareholder value creation. Our strategy is to steadily improve core earnings by expanding revenues through above average quality loan growth, defending our net interest margins through accelerated growth in higher yielding credit niches, a disciplined approach to funding costs and managing and leveraging our expense base. We'll discuss each of these elements in detail but let me hit the highlights before I turn the presentation over to Scott and Keene. Year-over-year loan growth totaled 14% in 2014 and is clearly a highlight for the year. Commercial and industrial loans, our bread and butter, increased 22% during the year with good growth experienced in all of our markets. Our niche lending activities primarily enterprise value lending, our senior debt products, and life insurance premium finance neither of which were solely dependent on local market growth showed excellent results for the year. We generated a $139 million…

Thank you, Peter. [Technical Difficulty] Slide number 3. Strong fourth quarter loan activity continues a pattern of quarterly increases which has produced 14% growth for the year. Fourth quarter was characterized by robust loan growth as we grew portfolio loans by $139 million. The increase resulted from a combination of both strong origination and reduced payoff activity in the quarter. Originations have trended up consistently throughout the year and were particularly strong in the month of December. New loan originations in Q4 were solid in all major sectors of the business we experienced net growth in the C&I, commercial real estate, construction development and consumer sectors of the portfolio. Slide number 4 illustrates this growth specifically in the C&I segment. The highest concentration of growth for the quarter roughly 75% was in C&I loans reflecting continued momentum in our niche business as well as new client relationships and increased borrowing activity related to capital investing needs of our existing clients. The remaining growth was primarily in construction and CRE categories resulting from an elevated focus on this market segment and modestly lower path volumes. We did experienced some year-end timing issue that work for a benefit in the fourth quarter relating to closings of large tax credit base loan funds that will be reallocated in 2015 as well as several short term bridge loans which were repaid after the first year. These closings represented roughly $20 million in loan funding. Overall, a large majority of our emphasis was focused around C&I in 2014, leading to 22% growth in this sector. We continue to expand niche business lines that provide competitive differentiation, pricing advantages and focus on adding new relationships with operating businesses that offer broader cross-sell opportunities and longer revenue life cycle. The components of our loan growth for the…

Thank you, Scott. Before I provide my comments on our earnings, I want to take a minute and highlight some of the changes we made in the presentation of the result this quarter. Our press release n the accompanying financial summary now include a reconciliation of what we believe are our core results. To summarize, the core earnings include the income and expense from our portfolio loans, deposits, wealth management and other banking activity as well as contractual interest income and funding cost for purchase of credit impaired loans. The core result exclude incremental accretion, acceleration and other income and expense items associated loans covered by FDIC loss share agreements. Additionally, the results also adjust for other items which may not be comparable from one quarter to the next. We've changed this presentation because we believe the core result presented most closely reflect our company's performance from our ongoing efforts to grow and manage our business. As a result, my comments today will focus primarily on that performance. Additionally, our press release provides a comprehensive analysis of purchase credit impaired loans and assets cleared by FDIC loss sharing agreements in guidance as to the size and contribution of those assets for 2015. As we continue with the -- turning to slide, Slide number 7 demonstrates the driver of changes in our core earnings per share from 2013 to 2014. We believe that during 2014, we took an important step in changing the momentum of our core fundamentals. Despite that our core earnings per share declined to $1.29 for the full year, we believe the quality of our earnings is continuing to improve due growth and core net interest income dollars from our portfolio loans, the improvements we have made in our operating expenses and the fact that core EPS included…

[Operator Instructions]. And we'll take our first question from Jeff Rulis of D.A.Davidson. Please go ahead.

A question on the, I guess the loan growth guidance of at a minimum I guess to double digit, given the late fundings in Q4 and expected payoffs that I read it right that you might start off the year slower than that base and then accelerate or just get a little more color on the pace of growth of the year?

Yes, I would say typically the first quarter is our slowest quarter and we had an extremely strong fourth quarter. So it is 10% overall for the year and I would say that that’s the correct observation that it will likely be a little bit slower to come out of the gate for the first quarter.

Okay. And Keene, are there expiration of loss share agreements in '15?

There are. I think we had one that came off at the end of this year and then they -- we're having that information right now. We have one that expires in the third quarter and then '16 we have one in the first and one in the third, and that’s the non-single family.

Got you. And I guess that all included in the guidance for this year of $6 million to $8 million in income?

Yes, that’s correct, and we have that baked into all of our guidance that we are expecting and that the numbers we put out an earnings release.

Okay, and that’s a net figure right that’s -- again expected expense or the --

Yes, that figure correlates to the table that we put out there. So that’s the pretax contribution that we expect from the purchase and covered assets.

Got it okay. Net of like call back and other

These are expenses but before taxes.

Right, okay. Thank you.

And we'll take our next question from Chris McGratty of KBW. Please go ahead.

In terms of the balance sheet if you kind of mix, if you kind of think about the mix that may evolve over the course of the year 10% loan growth how should we thinking about whether you will be funded it from [indiscernible] securities book given where the rates or how should I think about the size of the investment book is what I'm asking?

I think we would expect that we’re not going to shrink the investment portfolio any further; we need that for liquidity purposes. So I would expect it to be about the same grow proportionately with the balance sheet and we’re going to have to raise the funding with deposits and other sources to be able to fund the growth we’re expecting.

Okay. On the liability that were restructured in the quarter, is there any offer on the table or do you have the opportunity to kind of look at over the course of the next few quarters?

No, that was the remaining term advances that we had. So everything we have now is relatively short term at our home loan advances and other borrowings that I don’t think we have the ability to restructure.

Okay. Just one last one. We’re seeing a pickup in M&A and clearly kind of across the country big and small. With your capital level building and I assume the answer is its first organic growth but is there any situation either words you may look at M&A kind of either way in the next 12 to 24 months?

I just indicated what I've said before. On the buy side, the answer is yes provided we could find an opportunity that makes sense for us, and we could find that as organizations that have a similar business model to us and a really good understanding of commercial and industrial lending. And in that context, generally within our geographies; we’re not really looking to go beyond our current geographies. So that just becomes a question of limited potential although there are some of those opportunities and we’re very aware of them. In that context if any of those opportunities we think a reality we’d probably move on them. On the other side, as I've said a million times, we’re a public company; we work for salary[ph] every day of the week. We are aware that there is interest generally speaking in the market and we tend to be open in that regard, and from the Board’s perspective we’re going to do obviously what is the right thing from a shareholder perspective.

And we’ll take our next question from Andrew Liesch of Sandler O'Neil. Please go ahead.

Just one quick question on the -- in the expenses just looking at the other line, I am just kind of curious like what kind of what bounces there, I mean this quarterly figure was $7.8 million, last quarter $6.5 million, quarter before for that $6.8 million?

This quarter I think as we referenced we had some of the -- these are referenced in my comments. So that’s primarily overseeing those and there were a couple of more smaller items that contributed. So my comment I think summarized about $800,000 of that increase.

And then also your comments on loan growth it's at least the pay downs anyway it sounds like there is slowing across the board. Do you think I guess probably kind of difficult to tell the thing into the coming year but are there any like larger loans that pay off I think maybe if not then growth could be better than the 10% of your forecasting?

Andrew, this is Scott. Never had perfect vision on this obviously. I think the slowdown that we really saw from a category standpoint came on commercial real estate where we were seeing extended long term fixed rates and we have decided not to play that game. That’s really the category that slowed down. Some of the paths that I alluded to earlier it would create the lumpiness earlier this year were really sales of portfolio companies, asset sales. So I don’t see that as a trend per se. So I don’t see anything looking forward that would say we’re going to see major changes relative to pay downs.

And we’ll take our next question from Brian Martin of FIG Partners. Please go ahead.

Just last question, the pay-offs in the pay-downs you expect in 2015, I guess you are saying that this quarters paid some more realistic or representative of what you are exactly heading into '15?

I don’t think so. I think December had some seasonal issues and M&A is seasonally hot in the fourth quarter typical; the first quarter probably is slower on a seasonal basis. So I wouldn’t say that if we’re seeing earlier this year is kind of reflective of what we expect longer term, I think the 10% guidance as built in our expected pay off activity so.

And I would just only add to that as early quarter-to-quarter to get the loan growth that we had in the fourth quarter was quite a bit, although we cited some lower paydown activity, the origination the loans coming in were quite a bit higher to fund that activity. So we just don’t want to give you the wrong impression that because pay-downs might be similar in the fourth quarter that we are expecting that kind of growth.

Okay, understood. And the focus on deposits in kind of loan to deposit ratio I guess what are the expectations or kind of the parameters of where you would like to operate that? Or you like that ratio?

We like to drive it down below a 100%. We've gone away from the use of brokerage CDs and there are about half the level they were at the end of last year. So that’s a opportunity that we had we have we want to just manage though loan deposit down in and of itself. We’re mostly focused on making progress on co-deposits and Scott outlined some of the strategies we have there. And additionally, as Peter noted, we’re focused on other liquidity ratio and it relates back to some of the some of the comments on the size of the investment portfolio etcetera. So that would be the ratio that we would be comfortable operating a little bit higher on but we no longer turn that we need to drive that down a little bit more so that we have somewhere to grow. So we need to make some progress on the deposit side but we have some avenues on the wholesale front and if we need to let our core deposit activity generate and capture that.

Okay. And then you talked about the efficiency and improvements you guys have made with some of the revenue growth and the expense from this year. I guess it sounds like there is expectations that operating leverage continues and that efficiency ratios kind of gets into the I guess the high 50s, is that kind of what you guys are suggesting from the comments in the relapse and in prepared remarks?

So I think as we continue to see kind of loan growth we have we expect revenue to continue its upward trend and to the extent that we are able to hold expenses down or manage them appropriately I think the math with that out that we get the kind of growth we want to achieve that you could see that in the later part of 2015. But I would just caveat that with our expected guidance for expenses in $19 million to $21 million is still where we expect to be. And from our revenue standpoint we wherever you determine as you are modeling that out and what the trajectory shows certainly the fourth quarter substantial loan growth will help that.

We’ll take our next question from Daniel Cardenas from Raymond James. Please go ahead.

Could you give some color as to the competitiveness of the deposit market right now, and given your strategy is growing deposits, what kind of impact do you think that’s going to have on your margin?

Yes, I think we’re probably seeing deposit conditions slowly ramp-up maybe from smaller banks. Obviously, I think we see potential opportunity for deposits coming out of the larger institutions. I think I mentioned that we added some talents specifically focused on deposit origination coming off the larger bank platforms US Bank in U&B in particular. And with the issue some of the larger banks are going to have relative to the capital requirement on excess deposits we think there is some opportunity there which we really given some good strategic thought to particularly next we’re going to focus on. Some of those folks were already lending into, so we know those folks from healthcare perspective, enterprise value lending, correspondent banking. So while we don’t really see an issue from a competition standpoint, I would say the smaller banks are more focused on it than the larger in our markets.

Okay, so assuming the thing if you are not able to meet your deposit goals would that mean you would slowdown loan growth?

I don’t think that would be our expectation in the near term. As I noted in my previous answer I think we have some capacity to be able to use the wholesale deposit funding to some of the alternate way our ability to generate co-deposits on a long term basis will put a constraint on us to the extent that we’re not able to achieve it. I would turn around and say we have a variety of strategies that Scott has outlined that we expect to be able over a longer period of time generate additional core deposits that will need to fund the kind of growth that we expect to achieve.

[Operator Instructions]. And there are no further questions in queue.

Stefanie, I think we are good at this and just like to thank everybody for joining the call this afternoon. We appreciate your interest in Enterprise and if there are any follow-up questions we would obviously be happy to take them. So with that again thank you very much and good afternoon.